WIRELESS ATTACHMENTS, INC.
2789 S. Lamar Street
Denver, Colorado 80227
(303) 763-7527
January 17, 2012
Ms. Amanda Ravitz
Assistant Director
U.S. Securities and Exchange Commission
Washington, DC 20549
RE: Wireless Attachments, Inc.
Registration Statement on Form S-1
Filed July 27, 2011
File No: 333-17528
Dear Ms. Ravitz:
This letter is in furtherance of the recent telephone conference between Aslynn Hogue of the Division of Corporation Finance and our attorney, Jeffrey Bartholomew, regarding the staff's December 29, 2011 comment letter to Pre-Effective Amendment No. 3 to the above-referenced Registration Statement. We appreciate the staff's agreement to review our proposed responses, set forth below, to the three comments contained in the December 29 comment letter prior to submitting a full pre-effective amendment to the Registration Statement, and believe that our proposed responses fully address the disclosure and other issues discussed in the comment letter. The numbers of the paragraphs below correspond to the numbers of the comments contained in the December 29 letter.
1.2.Market Disclosure, p. 2—We propose to revise the Market Disclosure section to read as follows and we believe this revision (1) clarifies the limited market for solar powered charging devices and (2) explains how we estimated the number of U.S. adopters of solar energy charging solutions and how the GSMA report relates to our estimation of our target market. Our proposed revision is as follows:
Market
We intend initially to market and sell our products only in the United States, where we believe that the market for our products is limited. The available market research data that we have located and our assumptions behind our estimate of market size are discussed below. Because we are unable to find U.S. market forecasts or estimates for our intended products, we have necessarily made assumptions in estimating the range of the potential market size for those products. Our assumptions are also set forth below. We have researched markets for other solar products (not necessarily related to charging units for mobile phones and products similar to iPods) and have extrapolated information from those data and research. The forecasting of market size for relatively new products, however, is, by its nature, not an exact process, and there can be no assurance that our assumptions are valid or that our estimates will prove to be accurate. Moreover, the aggregate potential market size for our intended products is no indication of our potential revenues or unit sales.
As the market for solar products has grown, we have seen corresponding growth in the solar battery charger market. Some examples of different chargers that use solar energy are (1) digital camera battery chargers, (2) chargers for cell phones and iPods, (3) backpacks made with photovoltaic components, (4) chargers for hearing aid batteries (5) and chargers for laptop computers. The Company could not find any data or research reports that specifically addressed the market for solar powered chargers for the Apple iPod and iPhone. However, by examining other data and research materials from a broader range of solar product markets, we have tried to estimate the U.S. market for solar powered chargers for the Company’s proposed target market, as described below.
In 2010, Apple sold 47.5 million handsets and is projecting it will sell 65 million handsets in 2011. Apple reported in January of 2010 that it had sold 21 million iPods during the previous quarter (the holiday season). Because of the huge popularity of the iPhone and iPod, cottage accessory industries have grown up around Apple's iPod and iPhone. NPD Group estimated in April of 2010 the market for all iPod and iPhone accessories to be between $6 and $7 billion.
Batteries and solar chargers are used primarily in the off-grid solar markets, but also in on-grid markets, where the customer requires power during periods that the electricity grid is unavailable. GSMA, an association that represents mobile operators with connections across 219 countries, released a report in October of 2009 that estimated the global market for off-grid charging solutions for all types of mobile phones at $2.3 billion. The worldwide on-grid segment grew by 20% in 2009, and the off-grid market grew 23% in 2009, faster than on-grid for the first time in 15 years but on a much smaller base.
The Company was unable to ascertain from this report (or any other source) the U.S. portion of the off-grid charging market for mobile phones. According SolarBuzz, part of the NPD Group and a globally recognized market research business focused on solar energy and photovoltaic industries, the U.S. accounts for 5% of the aggregate worldwide PV installations market in 2011 and the U.S. market share of these installations is growing by a 47% compound annual growth rate. Solarbuzz estimates that the U.S. will make up 12% of the aggregate PV installations market by 2015.
From these data, WAI has estimated a U. S. market for solar charging solutions for mobile phones and other portable devices in 2013 between $103 million and $147 million. We estimated the low end of the 2013 market size by multiplying the U.S. 2011 market share of PV installations (5%) by the compounded annual growth rate in the U.S. market share of those installations projected by SolarBuzz (47%) for two years (from 2011 to 2013) and multiplied that figure by the GSMA's 2009 estimate of the market size for off-grid charging solutions ($2.3 billion). Finally, we multiplied that result by the growth rate in the off-grid market in 2009 of 23% (discounted to 20% from 2009 to 2010 to account for the lagging economy and further discounted to 15% from 2010 to 2011 to account for the continued lagging economy). We then applied to the resulting number a discount factor of 70% to account for (i) the widespread availability of cheaper and more convenient on-grid charging solutions within the U.S. market and (ii) the fact that there are mobile phones other than Apple products. The 70% discount factor also represents the fact that the Company will be offering solutions for iPods and not just iPhones. We estimated the high end of the 2013 market size by multiplying the number of projected 2011 iPhone and iPod sales reported by Apple times the average selling price of $43.69 of solar charging solutions that we found currently available in the marketplace and multiplied that product by our estimate of U.S. adopters of solar energy charging solutions of 3%. We anticipate that the percentage of U.S. adopters of solar energy charging solutions will be smaller than in other countries with fewer on-grid resources and due to the availability in the U.S. of cheaper and more convenient on-grid solutions. Due to the inherent uncertainties in the published estimates and projections that we have relied on (including inherent uncertainties associated with predicting future events in general), our own assumptions, and the fact that we have extrapolated data from the larger PV installation market to the market for PV battery charging solutions for portable products, there can be no assurance that our estimate of the potential U.S. market for our intended products will prove to be accurate.
Backpacks, brief cases and bags with built-in flexible solar panels are already available in today’s marketplace. Bags with photovoltaic panels are used to power personal electronics and laptop computers. We believe the market for solar charging solutions will continue to grow and by developing cloth membranes that are not only washable, but pliable, that active wear manufacturers and other OEM’s of cloth-based merchandise will find our membranes a unique solution to gaining new market share. It is our intent to create cloth membranes with solar panels that are not quite as noticeable, bulky and unattractive as current solutions. We expect to create a more elegant and efficient solution than those products already in the marketplace. By creating solar-charging cloth membranes that can be sewn into outdoor clothing and sportswear, we expect our customers will be able to create consumer products for those individuals that want to live an active lifestyle and remain connected. See “DESCRIPTION OF BUSINESS – Market.”
3.Exhibit 5.1 – Exhibit 5.1 has been revised and is attached to this letter for your review. You will note that assumptions (b), (c), (d) and (e) have been removed from the previous submitted Exhibit 5.1. New assumptions (a) and (b) in this updated opinion occur as a result of the updated identification.
Lastly, we wish to confirm our email address is info@wirelessattachments.com Can you check your records as an incorrect email address has been used in prior correspondence.
Best regards,
/s/ Steve S. Sinohui
Steve S. Sinohui
President
cc: Jeffrey A. Bartholomew, Esq.
Via Email
Exhibit 5.1
