Segway Merges with JWH Holdings (Segway UK)
 

I assume JWH is Jimmy Heselden, the founder and owner of Hesco Bastion. Jimmy has been a backer of Wayne Mitchell of Segway UK for a couple of years.

So often, the common stockholders get nothing. I wonder what the preferred stockholders got. The later investors, at least, probably lost money but got something.

However you look at it, from the stockholder's standpoint, this is not a success. However, it may mean a stronger company. This will make any future stock sale much easier, and it could even lead to the company going public down the road. (I don't expect it to, actually, but it would be more feasible now).

Whether this is good for us, depends on what the new management and the new owners do with the new money.

MY agenda would be to reduce costs, come out with a lower-priced (but still high quality) model, and improve marketing visibility.

I don't see a lot of room for production cost reduction, though. I wonder how much labor costs are -- my guess is not that much. I think a lower-cost model would pretty much have to sacrifice battery size.

So I'll go out on a limb and make that my prediction. Minor cost reductions that add to the bottom line (not lowering the price), and a lower-end model that's basically just a smaller battery.

I wonder if the timing of this is tied to finally getting some (vague) motion on the issue with the UK transportation folks? And whether it will have any influence on that?

Official Announcement???
 

I just check INC.'s website, and as of 5:49 PM EST 1/12/2010 it still lists Jim Norrod as CEO, with no indication of a change of ownership nor of the executive changes. It will be interesting to see the press release, assuming there is one in the works.
-segsurfer

I don't know when they'll announce, but I assume it will be shortly. Not sure why they would send out the shareholders letter significantly before such an announcement.

Do you think we will see Segway production go to China now? Which would lower cost substantially.

It's my understanding that this has been considered in the past (and in fact, there may be components now manufactured in China). But the entire production? I doubt it. Not enough volume to make it interesting to most Chinese manufacturers.

Moving manufacturing and batteries to China to reduce costs
 

Cost should come down. Here is my analysis

Well if my calculations are correct
Segway costs about $5000
Batteries cost $1500 and made by Valence Technologies

Valence might be gaining some traction they have got 5 million dollars in battery orders from Smith Electric Vehicles in the last month. With the way the government is supporting the electric vehicle the cost of batteries should come down this year. Brammo who is manufacturing thier bikes in the USA was selling their electric motor cycles for 12,000 with Valence batteries and dropped the price last November to 8,000. Citing the reason for the cost reduction was due to the components costing less. The most expensive component by far is the battery. They manufacture here because they want to be made in the USA and there really isn't that much cost savings for them.

Battery cost might have already dropped for Segway but they might not be passing it on the consumer because they don't think a $500 to $700 reduction in price would change demand. I would think there are some places with out losing quality that they could reduce costs on the $3500 of the rest of the cost but I am not an expert in Segway Manfacturing.

Hopefully new management will make some positive changes! Find ways to lower the cost. I think segway has been making progress in Tourism, Policing, and Military. They just need to make the jump to mainstream.

You are confusing the selling price with cost.

I would like to think batteries from Valence Technologies are "gaining traction", but I read a lot about battery technology for electric/hybrid vehicles, and Valence is rarely mentioned. Valence cells are already made in China, I believe, not the USA. Curiously, there doesn't seem to be a reference to Segway on the Valence website. If it IS there, it's buried pretty good!

To put it in perspective, $5 million would pay for batteries for about 4,000 Segs, by my estimate. If this were a monthly order, it might be notable. If it is an annual order, it does not significantly change the manufacturing economy of scale for manufacture of Lithium Ion batteries.

The Segway batteries are "purpose-built" soley for the Segway. At least I haven't seen any other applications using the Segway battery technology.

Others generally develop electric mobility products around existing battery platforms. That just wasn't really an acceptable option for Segway for a variety of reasons.

Unless they figure out a way to increase the number manufacturered, either by greater production or licensing to others (or both), I wouldn't expect much in the way of price reduction of the batteries.

I thought you weren't revealing his identity! :p

Looking forward to an official announcement. How long will it be before it makes the news?

I'm certain the timing is related, as Bob suggested, to the UK consultation taking place. These things don't happen overnight so the move has probably been in the pipeline for a while.

Where does Dean Kamen sit in all of this? Does he still retain any ownership? Anyone know?

Maybe it is not the Segway Product that they were going after
 

If you look at Jimmy's bio, he is a mining guy. Mining folks don't want stand up Segways, what they want is robotic platforms that can do the work that humans can't.

So my take is he bought Inc. for the techonology, specifically the RMP side of the house. Which we as Segway users took very little notice of. Though a few of our friendly dealers were actively working with RMP customers.

My take is RMP is the product, as well as the technology where the new company will focus its energy, and the PT will take a back seat, and it will not be long before it is discontinued.

Stuff like the Puma will go over to GM and they have no interest in a stand up single user PT.

wow what a shame if the segway goes away...that would be a sad day....

I thought the same myself, although Jimmy's core business is defence, not mining, the robotic platforms are probably of great interest, but remember he is a user of Segways at his factory. Last I heard he had about 10, and that was before he invested in Segway UK! I first met Jimmy about two years ago (2008) and he was very much into the Segway at that time. Also, I do not believe that Wayne will want to see the Segway PT dissapear if it is commercialy viable at all.
My guess is it will probably be a few months before we see any serious changes, if any. It will take a while to "see what they have got" and make any changes they consider necessary.

I'm not so sure. He is an ex-miner who was made redundant in the 1980's, that's true. He is also a (mulitple) Segway owner, enjoys them and has been very solidly supporting the push in the UK to get them legalised for public use. If he was only interested in other aspects of INC's inventory I doubt he would have thrown the money he has at continually badgering the DfT, with threats of court action, barrister's time, etc. to achieve recognition here.

A guy like that
 

This kind of guy does not throw money away on something that will not return something to him. I am sure he is a Segway enthusiast, it is hard not to be one, we all know that. But as a sucessful businessman he is looking to make his purchase profitable. Selling Segways to consumers is not going to do that, that has been proven already.

As Nick stated his defense contracts are an important part of the equation. They would benefit from the RMP, as that is the prime market at the moment for the RMP.

Inc. recently said they are focusing on their core PT market, which is commercial security and police use of the PT. I think we will see the consumer or leisure market become less of a focus to the company. The consumer is the one who wants to see the price drop. While the other markets will endure a higher price better.

In the short run (1st quarter) as PT's, and the key parts to them are in short supply, it should be interesting to see what happens and how the existing dealers react.

I love my segway, and I like the people I know at the company, but I still think the technology is sound, on its own...

Sure, there will be changes, but the concept has legs, so to speak. At this point, with the economy as it is, and with the less than stirling (Spelling is purposeful) Sales record to consumers, it very well not be the time to make a successful company from this product…

That does not mean that the product is faulty, or that it will not survive…

I have said for a long time, when I consider the SUV my wife drives, and my 6 year old daughter…

By the time my daughter is my age of 50, what do we think she will more likely use to do light errands around the neighborhood? A device like my wife’s SUV, or a device like my segway?

When Galileo used his telescope to prove his points about the earth orbiting around the sun, instead of the other way around, he was not met with overwhelming acceptance… He was many many years ahead of his time… It did not make him wrong, just in the wrong time. As far as I know, eventually, common knowledge caught up with his ideas, and the facts are the facts, and the earth orbits the sun, not the other way around…

The segway is a viable concept. It will survive, I believe… What form I cannot say for sure. But it is not really going anywhere…

Hearing Will say the Segway PT will take a back seat made me smile (any pun intended?) but then discontinued - it made my heart skip (okay, not really, but you know what I mean).

I'm not so sure on the huge potential of RMP sales as the primary basis for the business. Out of all sales, I would guess RMP has racked up the least, the commercial sector the most and the consumer sector somewhere in the middle.

In terms of Segway UK's desire to see the product made legal here, how would this support the idea of RMP being the driver - when most applications of RMP will not be out on the pavement or on a public highway?

So my guess on this is that the prices will fall in the UK. Segways will become legal as EPVs on the road and cycle lanes in 2010, and sales will increase across the board (in the UK). I'm not so sure at this point why things in other countries would change at all - but time will tell.

Looking forward to seeing this all pan out.

Humorous! You think the consumer/leisure market "will" become less of a focus? In fact, INC marketing has focused almost entirely on commercial/police applications for years now.

However, you are mistaken in thinking that only consumer/leisure markets want better pricing. Commercial and police markets perform cost analyses and compare Segs to other forms of transport.

I think you naysayers are far too negative about the situation. Somebody bought Segway, Inc. This means the company was willing to be purchased. Generally, company management does not give up it's seat unless there is a good reason. Consequently, I conclude that being purchased is a good thing, and better than the alternative.

What makes you think PT's and parts are in short supply?

There isn't any special "segway battery technology" that I'm aware of. Valance makes their Safion batteries which are not prone to thermal runaway (exploding), but they are hardly the only game in town when it comes to safe lithium-based batteries. In fact, A123 seems to be the name I hear everwhere when I hear about safe lithium ion batteries for transportation applications.

My hope is that the I2/X2 quality doesn't suffer and go down hill. I am willing to pay the going price now as long as they don't start making short cuts. Hopefully the US dealers will still be in business and that this will be as transparent as possible.

There may be something to the idea that the UK branch bought Segway for the RMP side. Today's Segway News ( published JUST today ) was all about the robotics platforms:

http://blog.segway.com/20100113spotl...e-way-774.html

They are very advanced (and much different) than others out there, although they may share the same cell types. Each battery contains it's own circuit board and intelligent charging system. The base merely contains the power supply/converter. The charging portion is in the battery itself.

The machine knows every battery that has ever been mounted to the machine and that specific battery's past performance characteristics. It knows when a battery has been attached to it for the first time as well. It knows when cells start to over-temp or are beginning to go bad. A truely "smart" battery.

Nobody, that I'm aware of, has anything like it. Why do you think they are 1/3 of the price of the machine?

Yes, but that's not Valence ... that's Segway. Valence provides the raw cells, which are indeed just another kind of LiFe chemistry. Everything surrounding the actual cells was designed, built, and programmed by Segway. If they choose to do so, they could go with any battery technology they see fit.

Really? That's news to me. AFIK it only seems to 'remember' a few cells, and the TI DSP that runs the whole system doesn't have a lot of memory to store much at all. I've opened and reloaded a Segway battery to replace bad cells, and had things work just marvelously.

You're working too hard, let Google do the searching:
http://www.google.com/search?rlz=1C1...nce.com+segway

Could be but
 

I'm not convinced on this. The blog could just be a coincidence. I'm not aware of any Segway UK involvement with RMPs prior to now and I'm not aware of any major successes Segway INC have had with RMPs. They list a few examples:

• Robosoccer
• NASA Robonaut
• Target practice

Interesting but not the kind of thing that will excite everyone.

I know just because I'm not aware of something doesn't mean it is so (or not), but until we hear something official or some further examples/thoughts, I'll stick to my guns on this.

Well, this found the references to Segway on the Valence site, but it confirms my point that the Segway references there are buried, mostly in the investor relations releases.

What I was trying to say is that Valence does not seem to be promoting their relationship with Segway. If there is a Segway anywhere in their "applications" section, I did not find it. Since Segway seems to be a rather significant portion of their business, I find this curious.

Segway provided the specs. Valence manufactures the boards, programs them, installs them onto the cells, and seals the cases. They do much more than simply manufacture the cells.

On the other hand almost every lithium battery on the market has a PCB installed in it to control over and under voltage/current. This is standard protocal for lithiums and has been for many years. If you take an old cell phone battery apart you will even see a small PCB in there.

Just to close the loop on this thread, Segway has confirmed the information that I shared from the shareholder's letter:

http://blog.segway.com/20100114segwa...erger-808.html

On a more serious note -- what does this merger mean for the availability of repair service, replacement parts, and general support for our i2/x2 and older PT models?

Should we be stocking up on common parts, to make sure we have them in the future? I've always been worried about things like the tires, the batteries, and such...

From what the blog entry says, and what I shared previously, Segway received an infusion of capital. Which means that they will continue business as usual for the foreseeable future. I imagine it won't have any effect on service, parts, sales, etc. -- anything that's day to day business.

John

Awesome! :)

Personally, I think the news from Segway, Inc. is good. In any case, tires and batteries are available from other than Segway, Inc.

How do battery revivers (which operate via the connector and do not require that the battery is opened) manage to force a battery to charge when there is a smart circuit between the power source and the cells?

Manchester Union Leader article on acqusition
 

http://www.wmur.com/money/22238140/detail.html

BEDFORD, N.H. -- Bedford-based Segway Inc. has been acquired by a United Kingdom company.

The company, creator of the Segway Portable Transporter, said Thursday that it was acquired by a United Kingdom company backed by Jimi Heselden, a prominent U.K. businessman and the chairman of hesco Bastion. Heselden is also an investor in the independently owned Segway U.K. distributorship.

The acquisition was made in connection with a merger that occurred on Dec. 24.

The company said Segway received funding that will be used to support the continued growth of the company.

I loved one of the blog comments I've read ... maybe in the UK we'll get a RHD version now :rolleyes:

I believe I read that the 'reviver' was designed by an ex-employee who must have knowledge of the battery's protocol.

There are pins in the harness which are not regulated by the PCB. Those are the pins that are used.

Updated article from NH Manchester Union Leader
 

http://www.unionleader.com/article.a...e-32da3afaf32b

MANCHESTER – Segway Inc. is announcing it has been bought by a company based in the United Kingdom, but Dean Kamen says that doesn't mean the company he founded is leaving New Hampshire.

"I have heard nothing of the sort," he told the New Hampshire Union Leader.

Reached by phone early this afternoon before the official announcement, Kamen confirmed that Segway CEO James Norrod had "moved on." But he downplayed the significance of the change, saying the company was bringing in "a new investor."

"I do not know the new investor.," Kamen said. "I do not know of any plans to be doing anything different than they have been doing the last few years."

Asked if the Bedford-based company would be staying in New Hampshire, Kamen said, "I've heard nothing to the contrary."

The company's two-paragraph announcement was posted on its web site under the headline, "Segway Inc. Announces Merger."

"Segway Inc. is pleased to announce that in connection with a merger that occurred on December 24, 2009, Segway was acquired by a company that is based in the United Kingdom. The acquiring company is backed by Jimi Heselden, a prominent U.K. businessman and the Chairman of Hesco Bastion. Mr. Heselden is also an investor in the independently owned Segway U.K. distributorship."

"Additionally, Segway also received funding that will be used to support the continued growth of the company," the statement said.

The technology web site engadget.com had reported on Wednesday that Segway Inc. "has effectively been bought out by one of its own dealerships."

The site reported a Segway shareholder had recently received a stockholder letter informing him that Segway Inc. would be merging with JWH Holdings, "a company formed by Segway UK simply for the purpose of this merger."

It further reported the so-called merger was "more of a complete buyout, with current CEO Jim Norrod supposedly set to be replaced by Tricia Laidler, and Segway UK's Wayne Mitchell stepping up to be the new COO."

In 2001, in a much-anticipated live television announcement, Kamen debuted his self-balancing, battery-powered "personal transportation vehicle." In 2006, the second-generation Segway PTs were introduced.

Financial details of the deal were not disclosed. Segway is a privately held company.