Chinese Wearables
The Korean lithium-ion battery industry is dominating the global market, but the local wearable industry is outperformed by Chinese rivals. Korean companies' struggles are due to the fact that their products are less profitable than those of Chinese firms, under the circumstances that in the wearables market, prices are still considered to be more important than product performance.
However, considering that the market has tremendous growth potential, it is difficult for local companies to overlook it. Samsung SDI and LG Chem have developed wearable and wire batteries, preparing for the growth of the wearables market.
According to market research firm B3 on July 15, the world's largest and second-largest small lithium-ion battery makers, Samsung SDI and LG Chem, each accounted for 7 percent and 1.5 percent of the battery market for wearable devices in the first quarter of this year. Given that the two firms' combined share of the global small lithium-ion battery market is more than 45 percent, their share of the battery market for wearable devices is minuscule. As for Japan, only Sony comprised less than 1 percent of the market.
Rather, Chinese companies are filling the vacancy left by Korean and Japanese rivals. Lishen captured 40 percent of the market, and ATL constituted 23.62 percent.
Industry analysts are saying that local companies' struggle in the market is attributable to the fact that the size of the wearable market led by smart watches and smart bands is still small. Moreover, local companies cannot beat Chinese competitors in price competitiveness, since mid to low-end products are leading market growth. In fact, Samsung SDI is reportedly rarely asked to make products other than the Galaxy Gear series, and LG Chem is also said to mostly produce batteries for LG's wearable devices.
Instead, Samsung SDI unveiled flexible batteries and mini pin batteries last October. LG Chem, on the other hand, is preparing for the wearable era with a new line of so-called, “free form batteries” like hexagonal and wire batteries.