Western Digital to Market Rechargeable Battery Technology : Contract: Irvine-based firm, starting to diversify, gets 20% stake in Power Battery Holdings in exchange for an exclusive distribution deal.

Broadening its reach beyond the computer industry, Western Digital Corp. said Tuesday that it will begin selling its technology for portable computer batteries to makers of batteries for camcorders and cellular phones.

The company said it would market its TakeCharge rechargeable battery technology through an exclusive distribution agreement with Power Battery Holdings Corp. in Bellevue, Wash.

Western Digital would acquire a 20% stake in Power Battery Holdings in exchange for granting the small company an exclusive distribution deal. Western Digital will hire contractors to make the batteries and Power Battery Holdings will distribute them to consumer electronics outlets.

Western Digital’s engineers invented a technology that permits rechargeable batteries to be plugged directly into a wall socket without the need for an additional charging unit.

Chief Executive Charles Haggerty said the move will diversify Western Digital away from personal computers. The company’s primary business is making PC disk drives, or the electronic gear that stores data on a PC.

Disk drives account for 90% of Irvine-based Western Digital’s billion-dollar business. A computer chip operation, which includes the dozen employees working on the TakeCharge technology, accounts for the remaining 10%.

Company spokesman Robert Blair said Western Digital believes its chip division will be profitable in its fourth fiscal quarter ending June 30 for the first time since 1990.

The TakeCharge marketing agreement represents the first time in roughly a decade that Western Digital has expanded its business focus beyond PCs. The company has been selling off various divisions to improve its financial position.

Haggerty said the company is very optimistic about its plan to target cellular phone and camcorder batteries. In-STAT Inc., a market researcher in Arizona, estimates there are 20.2 million cellular phones currently in use in North America, while Dealerscope Merchandising estimates that 3.8 million camcorders were sold in the last four years.