Dell, HP confronting laptop battery shortage

Dell Inc said on Tuesday the personal-computer industry was
experiencing a shortage of laptop batteries partly because of a recent fire at
a major supplier, but the company was working with other suppliers to limit any
price increases.

Dell, the world’s second-largest PC maker after
Hewlett-Packard Co, also said prices of its separately sold batteries used as
replacements or for surplus power had gone up because of the shortage caused
partly by the March 3 fire at LG Chem’s Ochang plant.

Notebook PCs accounted for 30% of revenue in Dell’s most
recently completed quarter, the same as desktop PCs. Software and peripherals,
which include battery packs, made up 17%.

PC makers may be able to offset the rising cost of batteries
with other components such as PC memory whose prices have been falling.

Citigroup Analyst Glen Yeung wrote in a February 29 report
that Dell had likely built up memory inventory in its fiscal fourth quarter
ended February 1, before the fire.

Analysts attributed an increase in Dell’s fourth-quarter
operating margin to lower prices for components including memory, which fell
40% to 45% from the fiscal third quarter, according to Citigroup analysts.