Makers tap support industries for power supply products to grow the line.
Piggybacking on a robust supply chain for batteries and power banks for different devices, Guangdong province is emerging as a major manufacturing center for power banks for iPad. The area represents over 60 percent of China’s output and exports of power banks. It hosts about 500 exporters, most of which can produce models for Apple’s popular tablet PC. More makers are expected to enter the line in the months ahead.
Guangdong’s established upstream network for power bank manufacture allows companies to procure ICs, and Li-ion or polymer cells in different sizes and specifications domestically. Enterprises that prefer imported inputs can work with distributors or trading firms with offices in the area. Both strategies offer suppliers with various pricing options that enable them to control costs. Furthermore, some makers produce the batteries themselves for better outlay and quality management.
Many power bank manufacturers based in other parts of China set up their component sourcing department in Guangdong to take advantage of the province’s rich source of inputs. Even MCUs and management and protection ICs, which are mostly imported from foreign partners such as TI, Atmel and Intersil, can be obtained from distribution agencies.
In addition, as a mature production hub for different consumer electronics, Guangdong hosts many service providers for various requirements ranging from PCB assembly to cabinetdesign and manufacture. This helps lower the entry barrier for small companies, thereby encouraging players to join the sector.
Because of these advantages, power bank makers in Guangdong can give more time to design development and monitor trends in terminal devices. Many businesses take only a month to launch a power bank following the release of a new gadget.
Key city hubs
Shenzhen and Dongguan are the major sourcing centers in Guangdong for power banks with a collective share of 70 percent of the province’s total output and exports.
The former hosts about 70 percent of Guangdong’s manufacturing base for this line. Most of these companies offer Lithium batteries, chargers and power supplies. They have many years of production experience in these categories and have established channels for sourcing raw materials. Some of them have the capability to make Li-ion and -polymer battery cells. Many can also design and assemble power management circuitry.
Major power bank suppliers such as Guangdong Pisen, BYD, Shenzhen Yoobao and Shenzhen Hali-Power are based in Shenzhen. The city likewise hosts top manufacturers of lithium battery cells, including China BAK and Shenzhen B&K.
In Dongguan, power bank makers leverage years of experience in lead-acid batteries. They are driving efforts to switch to “green” products. The key enterprises in the area include Dongguan Shanshan Battery, Dong Guan Amperex and Mcnair.
In addition to these two key city hubs, Guangzhou and Zhongshan are growing their respective supply markets for power banks.
Swelling production outlay and tightening price competition are threatening to curb the line’s expansion in Guangdong. For one, spending on raw materials for Li-ion and -polymer battery cells has been increasing. In July 2012, foreign companies raised the cost for imported lithium carbonate by about 20 percent and other inputs by 15 to 25 percent. As a result, local battery suppliers pushed up rates by 5 percent.
Dependence on international enterprises for key raw materials exacerbates the situation. More than 70 percent of the ICs required for production are sourced overseas. Over 80 percent of the battery separator requirement for lithium batteries is from foreign providers as well. Even with the growing number of local enterprises, makers admit it would take a longer time before the sourcing channels can be changed.
Meanwhile, the constant influx of newcomers is stoking a price war. Quotes of entry-level power banks have decreased to $10 or less per unit. Rates for mainstream models are $15 to $30. Most suppliers hope to keep prices stable but will continue to monitor market developments, in particular the labor situation.
Manpower spending in Guangdong has been climbing in recent years. Inland provinces such as Sichuan are building their lithium battery production bases and they have the advantage of lower labor costs. Some companies in Guangdong have in fact transferred parts of manufacturing to these areas to reduce outlay.
Growing power bank selection
Stand-alone and universal models drive supply in Guangdong. The latter type can charge various electronics besides the iPad, including mobile phones, handheld game consoles, MP3/MP4 players, GPS devices and tablet PCs.
Both Li-ion and -polymer cell versions are offered. The second variant has the advantages of slimmer casing yet higher capacity than Li-ion counterparts. Li-polymer is therefore used more widely in midrange and high-end models.
Some suppliers provide units that incorporate a solar panel for emergency charging. Besides enhancing compatibility with more terminal products, a growing number of releases combine a keyboard and Wi-Fi and Bluetooth.
Low-end power banks range from $8 to $14. These plastic-encased models use a Li-ion cell with 2,000 to 3,000mAh capacity, and support Mini and Micro USB. Midrange versions are between $15 and $25, and run on Li-ion or -polymer. They provide 3,000 to 5,000mAh capacity and may have dual USB ports. The enclosure may be aluminum alloy or plastic.
Products belonging to the $25 to $45 category feature 6,000 to 15,000mAh capacity and incorporate two USB ports. They adopt Li-ion or -polymer cell and have five to eight connectors. Most releases in this segment enable Bluetooth and Wi-Fi connection, and some double as keyboards.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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