Alright, let’s go through the facts. First of all…

August 10, 2021 – Enovix books an order with a “california based technology leader focused initially on the wearable device space”.

May 3, 2022 – Enovix announces smartwatch battery order. “While we’re excited about this order, we believe it may ultimately lead to opportunities across multiple categories within their vast portfolio of products”

Now, we know that this is a smartwatch battery that they sold because of their SPAC presentation and RSVA S-4/A:

Also, the timeline which was provided (which neatly falls into place with the dates above)

Who do you think they sold to? Well, we have some ideas based upon the press releases.

There are 8 large manufacturers of Smartwatches globally:

Company	California-based?	Vast portfolio of products
Samsung	No – Seoul, South Korea	Yes
Lenovo	No – Beijing, China	Yes
Garmin	No – Olathe, Kansas	Yes
Apple	Yes – Palo Alto, California	Yes
Fitbit	Yes – San Francisco, California	Yes, through Alphabet (acquired – 2021)
LG	No – Seoul, South Korea	Yes
Huawei	No – Shenzhen, China	Yes
Fossil Group	No – Richardson, Texas	No

So far, looks like only Apple or Fitbit/Alphabet fits the bill here.

Now let’s look at the rumors.

New Apple Watch 8 could have biggest display and best battery life yet | Tom’s Guide (tomsguide.com)

This says it will span 2 inches diagonally. Now let’s have a look at the batteries included in Enovix’s products:

Enovix Wearable Cell Data Sheets 220325

Their battery is 28.87mm x 17.30mm x 3.46mm

But of course, Enovix themselves have already contrasted and compared their own battery with Apple’s smartwatch battery (page 09). Isn’t that convenient?

Before I go on, I want to be clear about how awesome these batteries are.

Enovix battery = 28.72 * 17.34 * 3.39 = 1688 mm^3 with 337 mAh (see picture above)

Apple watch battery = 27 * 20 * 4.6 = 2484 mm^3 with 309 mAh (see picture above)

So the enovix battery is 33% smaller with 9% more battery life. That’s a big difference! Imagine how much more space you have in a smartwatch with these differences! Anyway, I digress. Let’s move on.

The dimensions work. Now, could Enovix produce enough batteries to fulfill the entire Apple Watch series? No. At an annual rate, Apple sells ~40M smartwatches per year and Enovix’s capacity is 45M batteries per year once fully ramped, and they’re not nearly fully ramped yet at their Fab-1 factory. Thus, they could probably do a production run of a super premium watch model…

and that’s exactly what Tom’s Guide shows – a new smartwatch with a larger screen and a better battery life. This is an ultra premium model. The new Apple Watch 8 Pro is currently rumored to be a limited production run of under 1M units. So can Enovix do that? Totally.

In the latest investor transcript from q2 2022 investor call, Harrold mentions that they plan on exiting 2022 with a “single million digit units” by the end of this year. Now, that can be 1M or it could be 9M. We don’t know. But let’s stay conservative and say 2M since they were still building out their fabrication lines earlier this year. Even at an annualized rate of 2M, that’s still 165k units/month. Enovix could totally do a super premium smartwatch battery with production less than 1M units.

Google or Apple?

One thing I have not addressed yet is… couldn’t Enovix sell to Google/Fitbit instead of Apple? Well, sure… sure they could, but then it wouldn’t be consistent with their investor presentation here (slide 37).

But before I go into depth about Alphabet vs Apple, I do want to point out something first. Enovix has removed data from their slides! I wonder why? Let’s look at their previous slides here: slide 22. Do you notice some information missing?

Before:

After:

Also noticed that the first slides were published in February of 2021 while it was still in “negotiating supply agreement.” Then in August an order is booked for the smartwatch wearable. So whoever was ordering these batteries already ordered them last year and put them through qualifications last year, as it shows on the diagrams above. This is not someone like Fitbit or Apple that buys something in May and slaps it into their smartwatch. Oh no no – they’ve been testing this for quite some time.

Back to the slides, they removed the customers served. Why? Because you can use that to see who they’re referring to.

Here’s the Canalys article they reference. (located within the footnotes of the slide)

There’s only one reference to the number 4 (referring to the 4M in the Enovix slide) in the referenced Canalys article, and that’s WatchOS new users. I think Enovix fricked up their analysis here – referring to 2020 customers served while linking to something that only references Q2 2020.

But wait… couldn’t it still be Fitbit? I mean, Fitbit shows 0.9M shipments in that quarter, and there are four quarters… that’s pretty close to 4M per year, right?

Well, sure, I’ll grant you that. However, for two reasons Fitbit smartwatches still don’t fit:

1. Fitbit smartwatches already get a 6+ day battery life. More battery life is not something that these users are clamoring for. However, Apple Watches might only last for 8-10 hours. Getting just a few more hours of battery life is something that Apple Watch users greatly desire.
2. The fitbit smartwatches are quite cheap – about $120-$240/watch. This is not a premium product here.

So yeah, I don’t foresee it could be Fitbit. Apple is really the only one that fits.

What about Garmin?

I mean after all, 1.1 * 4 = 4.4M and that’s well within 4M.

Are you serious right now? Just have a look at the battery lifetimes on this website: Garmin Latest Smartwatches (Latest Released in 2022) (thewatchland.com)

Do you really think a watch with a battery that lasts for 10-21 days has users begging for a better battery?

Back to Apple…

Furthermore, on the previous slide it shows us this…

So, the ideal smartwatch manufacturer they want to sell to is one that is power hungry. If you compare the 6+ day battery life of the Fitbit Sense – a smart health watch – to the apple watch, the apple watch has:

• Altimeter
• GPS
• Full color touch screen
• 5G
• Wifi
• Heart rate monitoring
• Blood oxygen sensor
• Microphone
• Bluetooth
• Accelerometer / gyroscope
• Body temperature sensor (new with the next Apple Watch, as according to Tom’s Guide above)

Of course, you don’t need to take it from me. Why not let Enovix tell you themselves why Apple needs a new battery in their smartwatch? (page 05)

I think it’s safe to say that the more battery hungry smartwatch wants a higher power battery.

Guys, it’s got to be Apple. It’s the only thing that makes logical sense with all the information we’ve been provided.

To conclude:

Here are the reasons why it’s Apple:

• We know they’re selling a smartwatch battery to a California based company with a vast portfolio of products. That can only be two companies, of which it can’t be Fitbit because those watches are not premium, are not power hungry, and already have a long battery life.
• It can’t be Garmin because they’re not based out of California and their smartwatch batteries already last 10+ days.
• Enovix themselves have argued why Apple Watch needs a new battery
• Enovix has the production capacity to make these batteries
• Enovix has compared their own smartwatch battery to Apple Watch’s battery
• Enovix marketing materials make a reference to power hungry, always-on health sensors on smartwatches. That lends further credence to the Apple Watch prediction.
• The new Apple Watch Pro is rumored to be a limited production run which is well within Enovix’s production capabilities.
• Enovix removing critical, identifying information from their slides shows they may have something to hide in terms of who their customers are. (Aside: If you want to see who else I predict for Enovix’s customers, check out section II.B in my blog post here: The bullish case for ENVX / Enovix | The Enovix Bull ). Using the removed information points more strongly toward Apple.

Holes in the logic:

There are a few things which my analysis does not cover:

• None of this analysis includes any details regarding the new Pixel Watch which Google revealed earlier this year. It’s anticipated they will have a firm launch date revealed during their annual hardware presentation in October. There are a few articles regarding the battery life of the Pixel Watch, but there’s nothing to pin it down on: Pixel Watch with short battery life hinted at by Fitbit app APK teardown – Android Authority – Google Pixel Watch: Everything we know so far | Android Central
• This analysis relies on rumors from macrumors.com which can be incorrect.

My prediction: During the iPhone event held this September, Apple will lead the way with Apple Silicon by using a new type of silicon in their battery for their ultra premium smartwatch. Enovix shares will soar.

Position: 2050 x ENVX October 2022 $30 CALL $0.65