Small Batteries Enter a Second Golden Age... Expanding Applications in Wearable IT and BoT

IT Devices Like Mobile Phones and Laptops Enter Prime Time
Expanding Applications to Golf Carts, Vacuum Cleaners, Portable Tools
Market Growth Extends to Wearable Devices and Micro Mobility

[Asia Economy Reporter Yoonju Hwang] Small lithium-ion batteries are experiencing a second boom. Small batteries, which were mainly applied in the IT appliance market, have entered a second heyday with applications expanding to golf carts and vacuum cleaners, and recently have been growing further by dominating the 'micro mobility' market.

Vacuum Cleaners, Golf Carts... Diversification of Applications Leads to Second Boom in Small Battery Market

Small batteries grew their market based on the explosive growth of IT devices such as mobile phones and laptops in the 2000s. They are classified by external shape into cylindrical, prismatic, and pouch types. Prismatic batteries were mainly used in mobile phones, while cylindrical batteries were used in laptops. Prismatic batteries accounted for more than 50% of the total, and cylindrical batteries also had a large market share initially.

However, since 2011, there has been a change in battery market share. Prismatic batteries, which led the growth of small batteries, rapidly shrank as consumer needs shifted toward slim designs and enhanced waterproof functions, leading to a transition to pouch batteries. The cylindrical batteries mainly used in laptops also saw a reduction in market size. Overall, the small battery market was in a stagnation phase.

The small battery market, which had been sluggish, experienced a revival through cylindrical batteries. This was due to the emergence of new applications increasing demand. The construction boom in the Americas led to high growth in the cordless power tool market, and cylindrical batteries began to be sought after in vacuum cleaners, golf carts, and electric vehicles. Especially for electric vehicles and golf carts, which require large capacities, demand for cylindrical batteries surged. While cylindrical batteries were previously used in quantities of about 3 to 6 units in laptops or power tools, electric vehicles now carry hundreds to thousands of these batteries per unit.

Adoption of pouch batteries has also increased in smartphones and laptops, and with the wearable device market such as wireless earphones gaining momentum, small batteries grew by 8% year-on-year to 9.5 billion units in 2020.

Expanding Market for Small Batteries... Leading the Battery of Things (BoT) Era Including Micro Mobility

Small batteries are gaining more attention in the IoT era, where all things are connected to the internet. As we enter the 'Battery of Things (BoT)' era, where batteries serve as power sources for all objects used by people, including IT devices and transportation means, demand is increasing.

Kickboards and electric bicycles, known as 'micro mobility,' are representative examples. Micro mobility is emerging as a new solution to traffic problems based on easy usability, eco-friendliness, and solving parking issues, with related projects expanding in major cities. These products mainly use cylindrical batteries.

Small batteries are also regaining attention in the small appliance market. Cordless products that enhance usability and portability, such as power tools for drilling walls, garden tools for landscaping, and vacuum cleaners, are being released in large numbers.

The industry expects pouch batteries to maintain their growth trend as well. This is based on the judgment that as smartphones and laptops expand their markets into wearable devices, demand for pouch batteries will also increase.