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Abstract Lithium‐ion batteries are indispensable power sources for a wide range of modern electronic devices. However, battery lifespan remains a critical limitation, directly affecting the sustainability and user experience. Conventional battery failure analysis in controlled lab settings may not capture the complex interactions and environmental factors encountered in real‐world, in‐device operating conditions. This study analyzes the failure of commercial wireless earbud batteries as a model system within their intended usage context. Through multiscale and multimodal characterizations, the degradations from the material level to the device level are correlated, elucidating a failure pattern that is closely tied to the specific device configuration and operating conditions. The findings indicate that the ultimate failure mode is determined by the interplay of battery materials, cell structural design, and the in‐device microenvironment, such as temperature gradients and their fluctuations. This holistic, in‐device perspective on environmental influences provides critical insights for battery integration design, enhancing the reliability of modern electronics.