Samsung SDI Aims to Boost Battery Sales on IPad-Led Tablet Boom
Samsung SDI Co. (006400) aims to boost sales of batteries for portable gadgets at twice the industry growth rate this year to capitalize on demand for Apple Inc.’s iPad and other mobile devices.
“We want to widen our lead more visibly,” Kwon Myung Sook, vice president of global marketing operations at the world’s largest maker of lithium-ion batteries, said in an interview today in Seoul. Global industrywide shipments may rise by about 10 percent this year to 4.6 billion units, she said.
Samsung SDI, which supplies Apple, is getting about half its revenue from the small-battery business. The company’s total battery sales may surge 26 percent this year, offsetting falling sales at its plasma panel business and contributing to a 10 percent gain in overall revenue, Kang Yoon Hum, an analyst at NH Investment & Securities Co. in Seoul, said in a March 27 report.
The company, which also makes cathode ray tubes, has enough capacity to meet battery demand this year, Kwon said. Samsung SDI plans to start producing batteries at its CRT factory in Malaysia in the second half of this year.
The battery maker may report an operating profit of 62.9 billion won ($56 million) in the first quarter, a 4 percent increase from a year earlier, helped by shipments of batteries for the new iPad, Lee Hak Moo, a Seoul-based analyst at Mirae Asset Securities Co., wrote in a March 30 report.
Batteries used in the new iPad, which has a faster chip and sharper display than its predecessor, have 70 percent more capacity than those used in the iPad 2, making them more profitable, according to Lee.
Samsung SDI accounted for more than half the batteries used in the initial batch of the new iPad shipments, according to NH’s Kang. Kwon declined to discuss the company’s business with Apple. (AAPL)
The company is benefitting from an early investment in batteries used in tablet devices, which are thinner than those for laptop computers, so harder to develop, Kwon said. Samsung SDI spent about 350 billion won in capital expenditure in 2011, 25 percent more than a year earlier to boost output of such batteries.
The South Korean company, which overtook Panasonic Corp. (6752)’s Sanyo Electric Co. (6767) unit as the top rechargeable battery maker in 2010, had about 24 percent market share after selling about 1 billion units last year, Kwon said. The company had a bigger share than what Panasonic and Sanyo held together for the first time last year, according to Tokyo-based Institute of Information Technology. Other competitors include Sony Corp. (6758) and LG Chem Ltd. (051910)
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