1. Battery in a bag
A Li-ion pouch cell is a sealed bag containing carefully layered anode and cathode sheets, separators between them, and -- permeating all of these layers -- a liquid electrolyte. Although tablet batteries comprise several cells (three in the new iPad), smartphones are generally powered by single cells. Either way, at one end of the battery, a printed circuit board (PCB) is connected to the positive and negative terminals of each cell and provides active protection against short circuits, overcharge, and forced discharge. Li-ion pouch cells tend to be fragile and rely on the smartphone case for protection, and so officially are not user-replaceable.
2. Squeezing in run-time
The energy density of a Li-ion pouch cell determines how much run-time you can pack into a given size (volumetric) or weight (gravimetric). Li-ion technology hit the market in 1991. Since then, processor transistor count has increased more than a thousand-fold, Li-ion energy density only threefold. Denser electronics are what make dazzling features possible, but they draw ever more power. Unfortunately, battery manufacturers are having a harder and harder time increasing energy density. This is why non-replaceable Li-ion pouch batteries are popular with smartphone and tablet designers. Without the protective case needed to make a battery safe for consumers to handle -- which does nothing for energy capacity -- they are thinner and pack more run-time into a smaller space.
3. The XYZ of cells
Energy density is affected by the thickness and the ratio between width (X) and length (Y) of a Li-ion pouch cell. Volumetric energy density falls off as the pouch gets thinner because the packaging takes up a higher percentage of battery volume. The optimal X-Y ratio arises because when the PCB is installed on the short edge of a narrow battery, there's more room for the active materials (anode and cathode) that actually store energy. All other things being equal, a narrow, thicker battery will deliver better volumetric energy density than a more square one. (An interesting Apple patent reveals ways to mold batteries in more complex shapes to fit into places like the bezel that are presently impossible to use.)
battery charging
...resulting in charging pauses and lockups.
Leyden Energy
4. The necessity of keeping cool
Li-ion pouch cells don't like it hot -- a common condition for smartphones, as anyone who's ever had to wait out the "cool down" message knows. The standard Li-ion chemistry depends on an electrolyte that reacts with residual moisture to create hydrofluoric acid, the most corrosive of all chemical compounds. Like all chemical reactions, this process doubles in speed with every increase in temperature of 10 degrees Celsius. The result is reduced calendar and cycle life: not only does run-time degrade with simple age, but each charge and discharge further reduces it, until the battery just doesn't last long enough between charges. Worse, Li-ion cells generate heat themselves during charge and discharge: the more power your smartphone calls for or the faster you charge it, the hotter the battery gets.
5. Building a smartphone
Three-layer or "carve-out"? The Motorola Droid Razr line (both Razr and Razr Maxx) is an example of the three-layer approach to smartphone design: screen, circuitry, and battery. The iPhone 4 comprises two layers -- screen and electronics -- with a space carved out of the PCB for the battery. In either case, a bigger screen means room for a bigger battery. Regardless of the other advantages of each approach, the narrower, thicker battery possible with the carve-out approach will offer higher energy density. In a three-layer approach, it's also more difficult to shield the battery from components that generate heat and thus shorten battery life.
6. Chemistry: Wild card of the pack
Improvements in Li-ion chemistry may offer dramatic improvements in energy density, giving smartphone designers more choices in the feature vs. run-time battle. There's a lot of promising research into new active materials and some new solutions already on the market. One of these uses a new Li-imide electrolyte that doesn't generate hydrofluoric acid and thus delivers a dramatic improvement in thermal stability and battery life. It also permits effectively thinner batteries by eliminating most of the swelling in thickness characteristic of current Li-ion pouch cells over their useful life, which forces designers to sacrifice cavity space to accommodate the swelling.