Portable CE directs current of specialty batteries to retail: from cellular phones to camcorders, consumers are generating the need for more ways to power up - consumer electronics

Discount Store News, April 15, 1996

Nationwide DSN Report - The boom in camcorders, cellular phones and laptop Computers has prompted Duracell and Eveready to produce specialty batteries for the aftermarket, causing discounters to tiptoe into the category.

A lack of standardization, especially in laptop design, however, is crimping the potential aftermarket sale of spare and replacement batteries to power them.

Most laptops now require a specific battery. Since it is prohibitive for any retailer to stock batteries for all but the laptop computers it sells, manufacturers keep for themselves the lucrative sale of extra batteries either through 800 telephone numbers or through computer specialty shops.

But for camcorders and cellular phones, a drive, for standardization has-produced results, and retailers now can cover about 80% of camcorders with just four skus of batteries and about 60% of cellular phones with nine skus, said Kevin Janco, director of marketing for Duracell.

Moreover, Duracell has persuaded some laptop vendors to design around its standardized batteries, Janco said, cracking the market for discounters and consumer electronics chains to sell replacement batteries at margins of around 50%.

Kmart, for example, is creeping into the specialty battery market, offering cellular phone batteries in more than 400 of its 2,100 stores, a spokeswoman said. The retailer carries one sku at $29.95 for Motorola phones. Gemini Industries makes the nickel cadmium battery for Motorola.

Target also recently got into the cellular battery category, said Janco.

Wal-Mart offers a wider selection of cellular phone batteries, cross-merchandised with phones in its electronics departments. It carries five skus of batteries sold under the CellTech brand, sourced from Taiwan, for $36.96. The batteries will fit the most popular models of Motorola, Oki, AT&T, NEC and Nokia phones. In addition, Wal-Mart offers three skus of Energizer (by Eveready) camcorder batteries in a 4-ft. specialty battery section alongside alkaline batteries. Prices range from $27.93 to $38.96.

In addition, it carries six skus of RCA camcorder batteries at prices ranging from $29.87 to $48.78. Thompson Consumer Electronics owns the RCA brand name. The top-end RCA battery features an indicator that lets the user know how much power is left in the battery.

Most of the peg hooks in the section are devoted, though, to camera, watch, hearing aid and Eveready rechargeable round-cell batteries.

Only about 10% of laptop buyers purchase an extra battery at the same time they buy the computer, Janco said. Since OEM batteries for laptops such as IBM and Apple cost upwards of $200, most laptop purchasers pass on buying a spare. CE chains tend to carry only the batteries for the laptops they sell, Janco said, but they usually carry a full line of camcorder and cellular batteries.

Nobody Beats the Wiz, for example, carries one Duracell laptop battery, at $149.99, to power a Compaq. But purchasers of IBM laptops have to buy extra batteries directly from the company.

For camcorders, the Wiz store in Eatontown, N.J., carries 11 skus of Eveready batteries, ranging from $40 to $80, nine skus of Maxell batteries at $40 to $60 and four skus of Sony batteries (no prices were listed at the time of DSN's visit).

For cellular phones, the Wiz carries six skus of Motorola batteries at $50 to $80 and 10 skus of Reconto brand, sourced from Taiwan, at $20 to $50. For special orders, the store can obtain a lithium ion battery with exceptionally high capacity for $180.

Staples carries six skus of ORA brand, also from Taiwan, at $30 to $60 for the Motorola phones it carries. On a recent visit, it was out of stock on a $129 Toshiba battery to power the Toshiba laptop it sold.

Duracell is dedicated to the nickel metal hydride technology for its specialty rechargeables, rather than to the industry standard, nickel cadmium. Its battery is virtually free of cadmium, a toxic metal that has prompted several states to require the recycling of traditional nicad batteries.

Duracell also claims that a nickel metal hydride battery can be "topped off" when it gets a bit low, without running into the memory problem of nicad batteries. Nicads should be completely discharged before being recharged to avoid losing capacity.

The advantages of nickel metal cost a premium, however, Janco said. A nickel metal cellular phone might cost around $69, compared to an average of $40 for a nicad.

Duracell is also developing a lithium ion battery for laptops that is lighter than nickel metal. Laptop sales are projected to hit 16.4 million computers in '97 from an estimated 13.0 million units this year and 9.2 million units in '95, according to a recently published report in Forbes magazine.

Total sales of specialty rechargeables for the three categories was $747 million in '95, Eveready estimated, and will reach $1.5 billion by the end of 1999.

Eveready jumped into the specialty field in January 1995 and now produces about 51 skus of nicad and nickel metal hydride batteries for cellular phones, camcorders and laptops.