Tablet and notebook battery market outlooks differ vastly

According to EnergyTrend, a research division of TrendForce, the ASP of 2.2Ah lithium cylindrical battery cell dropped to US$ 0.65 in November, representing a 7% decrease, while the ASP of 2.8Ah plunged to US$ 0.75. In addition, the ASPs of 2.3Ah and 3.2Ah lithium polymer battery cells dipped to US$ 1.48 and US$ 1.75, respectively, showing a less drastic drop. The lithium polymer battery, one of the more popular batteries in the market, is mainly adopted in tablet PCs. Weak demand caused inventory level to surge As a result of Europe’s chaotic financial order, the consumers’ purchasing intention has been low. Moreover, the exclusivity of the tablet and notebook markets and the consumers’ preference for low-price products has become more and more prominent. For this reason, the manufacturers have even revised the 4Q11 sales target for their high-price mainstream products and remain conservative about the outlook in 2012. The industry’s overly optimistic forecast on the market prospects in 3Q11 resulted in the high inventory level of batteries in 4Q11, and the sales of end-market products have been receiving increasing interest. Due to tablets’ higher popularity in the market, notebook batteries’ inventory level is higher than that of tablet batteries. Battery makers cut production due to slow market The low-price products’ high popularity compromises the shipment of high-end battery products, including the high-capacity battery, not to mention that the low-price products’ sales also fall short of expectations. The weak demand has caused the battery price in November to drop to the same level of 1Q11; the standard 2.2Ah battery price dipped to US$1.41, a relatively low price. According to EnergyTrend, major battery makers, such as Japanese company Sanyo and South Korean companies SDI and LGC, are planning to downsize their production in order to stabilize the battery prices, and the total reduction is expected to reach 10%. EnergyTrend expects the production cut to stabilize the lithium battery prices in 1Q12. However, the capacity of the lithium polymer battery is on an uptrend, which will become a noteworthy issue in 2012.