I have the option installed in K1 #1073. The biggest advantage is portable operation: one less item, one less set of wires. With the batteries installed, it makes for a tidy package if you're going back packing.
There are two disadvantages. First, the audio from the smaller speaker is much lower than the standard speaker. Since I use primarily headphones, that isn't a problem for me. It took me a lot of trying to fix what appears to be one of the outcomes of a smaller speaker and a smaller baffle for the speaker (the inside of the K1 is really cramped with the battery option installed).
The second disadvantage is the voltage level from the internal pack. With 8 NiMH batteries, the most I can get is 3 watts out of the K1 because the supply voltage is a tad less than 10VDC. For some operators, 3 watts is fine: what they can work is what they can work. I'm in that category. If you want 5 watts, you'll have to go with the external battery.
Finally, anyone who leaves the batteries in the rig when not needing battery operation is inviting trouble IMHO. Elecraft makes a big point in their documentation on removal of the batteries when not being used, good advice to follow.
It's a neat package with the internal battery option provided the limitations above meet your needs.
73 de Clark ke4rq
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