Sleek power banks with high conversion rates have become the top focus for China suppliers.

In an effort to create slimmer models, more manufacturers are adopting Li-poly battery cells instead of 18650 Li-ion cells. Li-poly cells provide about 20 percent more energy than 18650 Li-ion cells in the same form factor.

Shenzhen Vodasion Technology Co. Ltd offers an extremely thin 2500mAh power bank measuring only 96x62x6.6mm. At just a bit larger than a credit card, this could easily be the world’s smallest power bank. And since Li-poly cells are regarded as much more stable and safer than 18650, it is believed that China suppliers will prefer more Li-poly in future products.

In addition, asynchronous rectification techniques a way of improving rectification through the replacement of diodes with transistor-controlled switches are adopted by an increasing number of makers for higher conversion rates. With these methods, the conversion rate of power banks can exceed 85 percent, and may be able to reach 93 percent or more.

Further, manufacturers are also concentrating on differentiating their power banks by providing additional functions. Currently, suppliers add on basic functions such as an LED flashlight, laser pointer or dual USB ports.However, more sophisticated functions are in the pipeline such as card readers,a hard drive, fast charging and intelligent charging capability, a WIFI/3G router, and solar panel and wireless charging.

High-capacity models on the rise

At present, China suppliers produce power banks with capacities between 1000mAh and 26000mAh. Generally, models under 2200mAhare targeted at the promotional market, and those with 3000mAh to 8000mAhcapacity dominate the mainstream market.

As capacity needs increase, however, models from 5000mAh to 12000mAh will be the most in demand in the coming years. At present, models above 12000mAh make up less than 20 percent of China’s output.

Classified by type of battery cell, models with conventional Li-ion cells still account for the majority of the market. Considering the cost-to-energy rate, the cylindrical 18mmx65.2mm18650 cell is the most economical option for power banks. On the other hand, although they only perform slightly better in offering higher energy capacities,newer Li-poly cells are easy to shape and can be fitted into any shape of power bank with a smaller, thinner appearance and lighter weight.

Additionally, in order to enhance a product’s utility and sales appeal, suppliers are offering practical add-ons such as LEDs for lighting and alarm, laser pointers, card readers, intelligent charging, and over-charge protection features.

Cost breakdown

Battery cells and PCB panels account for 70 percent to 80 percent of the total cost of a power bank, and these two factors overwhelmingly determine the final pricing of a finished product.

Generally, battery cells account for about 50 percent to 60 percent of the total cost. Relatively inexpensive 18650 Li-ion battery cells are the most common option right now. Depending on the specifications and place of origin, they generally cost between US$0.70 and nearly US$4.50 per unit.

For example, the price of a single 2000mAh China-made 18650 cell (from BYD, BAK, ATL, Forster or Lishen, for example) is about US$0.80 to US$1.30, while local 2600mAh18650 cells are sold between US$1.20 and US$1.80.

Imported 18650 cells (mostly from Samsung, Sanyo and Panasonic) take more share in high-end power banks, and usually cost at least US$1.90. For imported cells, a 2600mAh 18650 cell costs at leastUS$1.90, while cells with 3000mAhcapacity can cost between US$2.40 and US$3.30.Cells with 3200 to 3400mAh will be priced between US$3 and around US$4.50.

Li-poly cells with same capacities cost20 percent to 30 percent more than conventional 18650 Li-ion cells. Considering their reasonable cost-to-energy rate, most makers purchase Li-poly cells from China suppliers, with the unit cost around US$1 to US$1.50 per 1000mAh.

The second major cost component, PCB panels,accounts for around 10 percent to 20 percent of the overall cost of a power bank. Low-end PCBs with domestic 3-in-1 or 5-in-1 solution chips usually cost under US$1.70.More sophisticated PCBs with independent battery charging management ICs and intelligent protective MCUs (from both domestic and Taiwan manufacturers) will be priced between US$1.80 and US$3.30.The most expensive PCBs with Seiko or Texas Instrument chips are priced above US$6.50 per unit. According to suppliers interviewed for this story, the first two types of PCBs dominate the majority of the market.

Finally, the remaining cost of a power bank comprises the aluminum alloy or ABS/PC shell with different surface treatments (about 15 percent), and the last 10 percent to 15 percent is from other materials and labor cost.

The bill of materials of power banks is quite similar across the industry, and there is little space for suppliers to differentiate. Therefore in 2015, expect most suppliers to keep their power banks in the same price ranges as 2014, and even drop a little bit if the order volume increases significantly.

Supplier demographics

There are an estimated 5,000 power bank makers in China, and about 85 percent of them are located in Shenzhen, Guangdong province. Despite focusing on mature Asian markets, South America, Western Europe and the US are expected to be booming destinations in the future. It is conservatively estimated CCID that overall annual sales from domestic and export can reach almost US$4.62 billion by the end of 2015.

Classified by annual sales and production output, large power bank makers usually have strong R&D and production capabilities, including in-house manufacturing of PCBs, shells, assembly, and even battery cells. With a monthly output of at least 300,000 to 600,000 units, the largest companies may boast annual sales exceeding US$150 million.

Middle-sized manufacturers usually have about 300 to 600 staff, with monthly output between 100,000 and 250,000 units.Annual sales are typically between US$10 million and US$35 million.

Finally, it is estimated small manufacturers make up more than 50 percent of the industry. With basic R&D and in-house assembly, these companies typically have fewer than 200 workers and staff, monthly output is generally between 15,000 and 80,000 units.Annual sales are between US$2 million and US$8 million.

Tips on selecting a qualified supplier

Even though power banks is a relatively new category that started only a few years ago, it is without a doubt already a mature industry. All China makers face furious competition with product innovation, and even more in pricing.

With this pricing pressure, most large and middle sized makers choose to concentrate more on developing better, more differentiated products, ensuring high product quality and increasing capacity.

On the other hand, some smaller manufacturers have sunk into cutting corners by providing cheap but unqualified products, with misleading power capacity, second-hand battery cells and rough processing. Then, how to identify a qualified power bank maker? Here is some advice:

1. Do not choose suppliers only on price, and especially be wary if the price is unexpectedly low.

2. Tear-down inspection is a must. This is the most direct method to judge the quality of a product:
    a. Test cell capacity with battery testers
    b. Check if there is a tag of clear specs on the cell’s packaging
    c. Check if there is any over-welding, solder leakage or burns on the inside
    d. See if there is a layer of insulation or protection between the cells and PCB
    e. Make sure PCB is clean and clear

3. Visit the factory if possible. A good factory should be well-organized in terms of plant layout, especially the     warehouse and production lines. Some of them comply with the 5S standard and have ISO certification.

4. Ask if they conduct in-house R&D on PCB design, molding, appearance and even battery cells.

5. Focus on the QC process:
    a. For IQC, ask if the company has professional battery testers for cell inspection, or if they conduct only         visual inspections.Ideally, they should conduct IQC on 100 percent of parts.
    b. Ask if the supplier conducts IPQC during production
    c. For OQC, the age test is important. The cycle time can vary from one supplier to another, but generally most companies have an 18-hour cycle with 8 hours for charging, 2 hours for discharging and another 8 hours for recharging. Some makers have a longer QC process, with 3 or 4 cycles, usually lasting 72 hours, while others shrink the process into 7 to 8 hours.

Buyers ensure power bank quality with trusted suppliers

Verifying the capacity of power banks can take hours of time that many are not willing to invest. The best solution seems to be finding reliable companies and sticking with them.

"In the past, when we first started out, every single battery cell we'd buy from the supplier, we'd do the test, but that's very time consuming," said Wei Zheng, sales manager of power bank supplier ETycho. "Now we just make sure we just do business with reliable battery cell suppliers."

Zheng added that ETycho continues to randomly check battery cells, as well. Some power bank companies might not be as scrupulous as others, though, so buyers of the power banks also remain vigilant and look for reliable suppliers.

While Zheng said the most accurate way to measure capacity of a battery is with expensive specialized equipment, some people are using phone apps to gauge how much power the devices hold. This was the case with a couple buyers from a Latin American promotional company who asked not to be identified to avoid angering their suppliers. The buyers said quality issues come up at any fair in any product category.

Calvin Ng of the Malaysia-based distributor Global Synergy said he also uses his phone to check power banks by running through a few cycles. Ng said he avoids less established companies, preferring brands he knows will help fix any problems he has with the products.

There are a number of factors that can result in the sale of under-capacity batteries. Zheng said suppliers are under pressure to get orders out, and the very competitive market probably does not help matters as manufacturers look for ways to keep prices down. This can result in cutting corners and even putting out faulty products, Zheng said.

“Like any other products, there are going to be some faulty ones that are below expected capacity,” he said. “What do they do with it? They can trash it or they can try to sell it on the market to salvage whatever value they can get out of those lower quality units.”

Zheng also said cell manufacturers like to have some of the expensive machines available for buyers to see, giving the impression of good quality control. These machines might never or rarely be used, though, because the process of checking capacity is very time consuming.

The preference for sourcing power banks in China seems to be finding reliable suppliers. Power bank suppliers have cell manufacturers they trust, and power bank buyers have suppliers they trust. Still, it would be a foolhardy business practice to completely put one’s business in the hands of a third party, so buyers prefer to follow the old maxim “trust, but verify” by conducting random checks to ensure their trusted partners are maintaining quality.