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First Company To Use Energous WattUp Wireless Charging In Its Products May Have Been Identified

|Includes: Apple Inc. (AAPL), SMAWF, WATT

Summary

Energous announced on April 25 that it has signed a partnership with a battery maker for medical wearable devices.

Though Energous didn't name its partner, there is a company that 100% fits in that profile.

Energous has adjusted its go-to-market strategy.

Energous (NASDAQ:WATT), is a start-up that makes WattUp, an RF-based uncoupled wireless charging technology, allowing charging of electronic devices at distance.

It recently made a partnership announcement that I found was worth digging into. The reason is I wanted to guess the name of the unnamed partner and examine the opportunities this represents for the company and those who have bet on it.

The press release :

On April 25, the company announced a joint partnership & licensing agreement with an unnamed company for the miniature version of its WattUp power transmitter and receiver.

Following is an extract of the press release :

Energous Corporation ("Energous®" or "the Company") (NASDAQ (NBI): WATT), the developer of WattUp®, a revolutionary wire-free charging technology for mobile and IoT devices that provides over-the-air contained power at a distance, today announced a partnership agreement with a market-leading specialty battery company in the hearing devices and wearables market. The company has signed a joint development and licensing agreement with Energous (WATT) and anticipates shipping WattUp receiver technology as well as a Miniature WattUp transmitter.

The unnamed (for NDA reasons) company is a maker of batteries specialized in medical/wearable devices as you see in bold on the above extract.

Products from this partnership are expected to be commercialized in late 2016 or early 2017, according to the full press release relayed by SeekingAlpha.

The unnamed partner and the opportunities behind this deal :

With some research, I've found one company that definitely fits the profile of this partner.

This company is called ZPower and is the inventor and maker of silver-zink based rechargeable batteries which have the specificity of being able to store a lot of power in a very small battery.

Usually, Silver-zink batteries have the drawback of being one-time use and require frequent replacement. But ZPower has invented and patented a technology that allows 400 charges without losing in efficiency.

These kind of batteries are aimed at hearing-aid wearable devices as explicitly described on ZPower's web site and its product line-up.

When digging into ZPower's list of compatible devices, we can find that Beltone, Phonak, Rexton and Siemens (OTCPK:SMAWF), among others, are the actual brands that could power their products with this technology.

More importantly, the exhaustive list of compatible devices corresponds to the partner's "market-leading" aspect mentioned in Energous press release.

Most of the Southern California based company's leadership and staff is composed of PhDs and that includes their CEO, Ross Dueber. Just like Energous, ZPower has presented at the Consumer Electronics Show in Las Vegas and was awarded for its technology.

Unfortunately, neither Energous or ZPower have responded to my questions regarding this partnership and the positive impacts it could have for them.

Energous' adjusted go-to-market strategy :

In the past year, Energous, which is led by Stephen Rizzone, has announced joint development agreements with other partners, including a Tier-1 company in the mobile devices industry, rumored to be Apple (NASDAQ:AAPL).

It looks like Energous' go-to-market strategy was quite adjusted since late last year when the company introduced its miniature WattUp transmitter. The idea is to first push for a low power and range version of their technology that would more easily meet current FCC approval safety criteria.

It's clear that the initial project of having over 4W charging mobile devices at distance of several feet is not for 2016 or early 2017 but at least for late 2017 (or even later...).

This strategy adjustment does however have a few advantages :

  • It partially mitigates the immediate risk of the FCC Go/No Go for the initial launch of the technology in commercialized products.
  • It creates opportunities to bring the technology to other markets such as small IoT or wearable devices because of the smaller size and cost of the miniature version.
  • It could help Energous generate some revenue more quickly.

However, all Energous investors, but more importantly partners such as their heavily advertised "Tier-1 partner", have bet on the initial promises of the company to actually charge sub-10W devices at several feet distance. And for this to materialize, a huge work with the partners and regulators could be required and that could take a lot of time, or just not happen at all.

Conclusion :

Maybe we finally have a partnership between Energous and another company that we can believe on. Though not as big and exciting as the mobile devices market which is Energous' initial target, new partnerships with the miniature transmitter are clearly a step forward to the company making its technology commercially available and create its first revenue stream.

However 2017 and 2018 could be a very challenging years for the company as partners and investors are waiting for Wireless charging of gadgets at several feet distance to actually materialize, something that may, or not happen.

Disclosure: I am/we are long WATT, AAPL, EMC.