The lithium-ion battery works on ion movement between the positive and negative electrodes. In theory such a mechanism should work forever, but cycling, elevated temperature and aging decrease the performance over time. Since batteries are used in demanding environmental conditions, manufacturers take a conservative approach and specify the life of most Li-ion between 300 and 500 discharge/charge cycles.
Counting cycles is not conclusive because a discharge may vary in depth and there are no clearly defined standards of what constitutes a cycle. Read more about What Constitutes a Discharge Cycle?. In lieu of cycle count, some batteries in industrial instruments are date-stamped, but this method is not reliable either because it ignores environmental conditions. A battery may fail within the allotted time due to heavy use or unfavorable temperature conditions, but most quality packs will last considerably longer than what the stamp indicates.
This article is from Battery University, click to see more details: http://batteryuniversity.com/learn/article/how_to_prolong_lithium_based_batteries
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