From my own article over at Android Beat:
...I decided to test this, buying a brand new cell for my smartphone, charging it fully and then playing the same one hour video numerous times, noting the battery percentage reported at each stage, then recharging and repeating several times...
...Here then are the results from the first four charge/discharge cycles on a new aLLreli replacement battery. (aLLreli was a new name to me, but in use it seems just as reliable as the ever-popular ANKER cells):
...After some research, it seems that, following long periods (months) in storage, a ‘passivation’ layer* builds up on the cathode of the battery and it takes a few charge cycles for this to be effectively broken up and battery capacity restored. So, when you buy a ‘new’ battery what’s actually happening is that you’re buying a battery that was at full capacity and raring to go from the factory but which has sat on a supplier’s shelf for months waiting for you to buy it...
You can read the whole article here, which goes on to point out that the same passivation layer builds up if you store a battery or a sealed smartphone for long periods, plus there are links to a piece on reducing the degradation of your smartphone battery over time.
There's a school of thought which says "Why worry about all this, just use the phone/battery and be happy?" I understand this viewpoint, but you have to admit that there's a certain satisfaction in knowing that your battery is giving you the most it can each day and that, a couple of years down the line, your device will still be saleable or useable by whoever you pass it on to, all because you understood a little of what makes a battery tick in the first place.