My new 3g iPhone is a wonderful device, but it has one very serious short-coming. The battery life stinks. I never get through a day without needing to recharge. Sometimes the low-battery warning shows up by noon. The phone isn't defective. It just harnesses a bunch of battery-draining technologies, like a powerful (relatively speaking) processor, a 3G radio chipset and a large, bright display. In fact, the iPhone isn't really a phone at all. It's actually a miniature computer. More such devices are on the way, like HTC's G1 phone (a.k.a. the Google phone) which ships later this month. An entire industry is springing up around these gizmos, with developers creating hundreds of applications for the mobile Internet, including things like delivering services using GPS or even showing live TV on mobile devices. As smart phones get ever smarter, they could become the most popular way to connect to the Internet.

How to power these things? Batteries get better every year, but improvements aren't keeping pace with the innovation that's taking place at the device level. Reducing the power consumption of chips and displays could squeak more minutes out of a single battery charge, but that alone won't make enough of a difference. For now, smart-phone users like me are stuck carrying a power cord everywhere we go, and constantly looking for a wall plug. "Batteries are holding back the portable revolution," says Ken Lazarus, chief executive of Lilliputian Systems, a company that claims to have found a solution.

Lilliputian, in Wilmington, Mass., has spent six years developing a pocket-size fuel cell that runs on butane and can charge a smart phone through a USB cable (now a standard in almost all smart phones). Lilliputian calls the device a "portable power solution" and hopes to have it on retail shelves by the holiday season in 2009. The product consists of two parts—a generator housed in a plastic box about the size of a deck of cards, and a one-inch-by-two-inch butane cartridge that looks a bit like the ink cartridges you put into a printer. Snap the cartridge onto the generator, and you're making electricity. Cartridges will sell for two or three bucks, and each one will charge an iPhone 16 times. The generator will cost $200 to $300, Lazarus says.

The fuel cell was the brainchild of two Massachusetts Institute of Technology students, Samuel Schaevitz and Aleks Franz, who were studying ways to create tiny chemical reactors on silicon chips. In 2001 they founded Lilliputian to pursue the idea of developing a silicon-based fuel cell to power portable devices, using butane. "This was a science project," says Jeff Andrews, a Lilliputian board member and a partner with Atlas Venture, the Boston firm that put up the first round of financing. "We had a couple of very bright guys with some good ideas. But there was a ton of risk."

For one thing, Lilliputian had to build a facility to make semiconductors. It's a small factory, and the machines are older models, bought used. But it still cost $12 million to build. All told, Lilliputian has raised $60 million in three rounds, and it still needs to raise more, in part to expand its chip-making facility to scale up to production volumes.

The biggest challenge for Lilliputian's engineers was finding a way to insulate the fuel-cell semiconductor and contain the heat thrown off by the chemical reaction. The Lilliputian fuel cell operates at 1,500 degrees Fahrenheit (800 Celsius). Lilliputian solved the problem by encasing the semiconductor in a metal vacuum cap, the same way a light bulb's filament is encased in vacuum-packed glass. The chip package gets up to about 140 degrees Fahrenheit (60 Celsius) when the fuel cell is running—it's hot to the touch. But the plastic outer casing of the power pack only gets to about 95 degrees Fahrenheit (35 Celsius).