A Coppertop In Every Laptop?

Ronald E. Compton, Aetna Life & Casualty Co.'s chief executive, hates the 10 pounds of spare batteries he has to lug around with his laptop computer. He carries them because if his main batteries won't take a recharge, he can't just run to a store for replacements. They're a unique size, fitting only his Compaq Lite 4/25C. So his staff has to get them from a computer store or call Compaq. It's a pain Compton can't avoid. His laptop, he says, is "my one-on-one way of communicating with people."

The same inconvenience afflicts owners of about 150 other models of laptop computers, cellular phones, power tools, video cameras, and other portable devices that use nonstandard rechargeables. And not only are the batteries hard to get but they're expensive: up to $300, nearly twice the price for standard batteries that perform the same functions.

Who wins? For one, makers of laptops and cellular phones, who impose fat markups on batteries for their captive customers. They sell about $1.4 billion worth of special batteries a year, estimates Jane Gilday, an analyst at Hancock Institutional Equity Services. The other big winners are the battery makers. Japanese companies--led by Sanyo, Matsushita, and Toshiba--control 96% of worldwide sales of the high-energy, rechargeable, nickel-cadmium batteries used in such gear as laptops.

Now, though, other producers--particularly Duracell International Inc.--see a chance to cast themselves as champions of the consumer and pick up business to boot. The Bethel (Conn.) company is crusading for the adoption of battery standards: preferably, two sizes for cellular phones and four for computers. Says Michel J. Vernhes, president of the new-products and technology division of Duracell Inc., the U.S. subsidiary: "Let the consumer make the decision who to buy batteries from."

Duracell has had talks with some 50 makers of laptop computers and other gear. That puts it ahead of its U.S. rivals, although Rayovac Corp. in Madison, Wis., recently brought out a standard-size battery for clocks in desktop computers, which replaces 30 different sizes. Eveready Battery, a unit of St. Louis-based Ralston Purina Co., makes some custom batteries. It says it isn't active in the standardization fight because it would rather have device makers take the lead in deciding what they want.

Duracell, meanwhile, is starting to win converts. In February, Compaq Computer Corp. began using standard Duracell batteries in its Contura Aero subnotebook computers. "We know it's very difficult for our customers to deal with a number of battery sizes across our line of products," says James W. Hartzog, senior vice-president of Compaq's portable computer division. Fujitsu Ltd. is using Duracell's nickel metal-hydride rechargeable batteries in its PCX pocket flip phone. And Audiovox Corp. is using Duracell standard batteries in its Minivox 500A portable cellular phone.

COMPROMISES? In parallel initiatives, Duracell has worked with AMP Inc. in Harrisburg, Pa., to standardize the connector between the battery pack and the computer. And on Apr. 21, Duracell and Intel Corp. were to announce that they have created a software protocol to let laptops and other devices monitor and manage a new generation of "smart" batteries. Duracell CEO C. Robert Kidder predicts that "most of the computer industry will be converted [to standard batteries] in five years."

Perhaps. Some computer and cellular-phone makers argue that standard batteries would limit their creativity. "To create a standard battery, in many cases, is going to cause a tremendous amount of compromise," says Bret Berg, director of mobile computing products marketing at AST Research Inc., an Irvine (Calif.) computer maker. That argument doesn't hold water with Compaq's Hartzog, who says that not having to worry about battery design could cut 25% of the cost of designing a laptop.

This isn't the first standardization fight in the battery world. In the 1970s, battery makers established standard 9-volt alkaline batteries for smoke detectors. In the 1980s, they did the same with batteries for 35mm, automatic point-and-shoot cameras. In each case, they met resistance from companies that wanted to control the replacement market. Change comes slowly. "You cannot make an elephant dance," says Duracell's Vernhes. But with the high-energy rechargeable battery market headed for an estimated $10 billion in worldwide retail sales by 2002, no wonder Duracell and others are trying this power play.

Chris Roush in Bethel, Conn.

Before it's here, it's on the Bloomberg Terminal.