The Motley Fool has written about Altair (NASDAQ:ALTI) for a number of years now, and most of the stories have tended to criticize various aspects of the company. In spite of some encouraging recent news, I would like to offer yet another reason for investors to be cautious about investing in Altair: a competitor that seems to hitting on all cylinders. The company is A123 Systems and, like Altair, it also develops lithium-ion battery technology.

I see several things to like about A123 Systems. First, it already has a successful commercial product. Since early 2006, A123 has been supplying battery cells to Black & Decker (NYSE:BDK) for a variety of power tools, including drills, saws, and nail guns. Thus, it is actually generating meaningful revenue -- something that has so far eluded Altair.

Second, its car battery technology has attracted the attention of a major automotive company. Earlier this year, General Motors (NYSE:GM) announced that it would be working with A123 to develop a new battery for its Saturn VUE Plug-in program.

Now, to be fair, Altair is working with Phoenix Motorcars, which recently announced modest deals to supply both Alcoa (NYSE:AA) and Pacific Gas & Electric with hybrid-electric vehicles that utilize Altair's batteries. But the fact that GM wasn't interested in Altair's technology does beg a serious question: Why not?

And A123 is not just a two-trick pony. In addition to its deals with Black and Decker and General Motors, it is also partnering with General Electric (NYSE:GE) on the development of a hybrid fuel cell bus.

Apparently, GE was pleased enough with the technology to become the lead investor in a $40 million secondary financing round announced this past January. Another investor in that deal was Proctor & Gamble (NYSE:PG), which is most likely eyeing A123's technology for its Duracell battery unit.

Alas, the possibilities don't stop there. A123 System has so far attracted more than $100 million in venture capital, including large chunks of money from Motorola and Qualcomm, both of whom could utilize A123's lithium-ion battery technology.

Real products, real partnerships, and access to large companies with deep pockets are all things that A123 has going in its favor. Until Altair can show that it is making progress on a similar scale, I will remain pessimistic about its long-term outlook.

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Fool contributor Jack Uldrich owns stock in GE but none of the other companies mentioned in this article. The Fool has a strict disclosure policy.