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Published On: Thu, Sep 21st, 2017

How much is the mobile accessories market worth?

Everyone knows that the cell phone market is worth billions of dollars a year. Apple and Samsung alone will likely net around $100 billion in profit between them this year. The two smartphone giants are among the richest companies on the planet.

Apple posted a $52.9 billion revenue for the first quarter of 2017 making an approximate 10.49 billion in profit. Whereas Samsung made 11.5 billion in profit over a similar period. Samsung is expecting a record-breaking 2017, a nice rebound following its misstep with the S7 fiasco last year.

Globally there were nearly 1.5 billion smartphones shipped in 2016 up from the 1.45 billion in 2015. So it should come as no surprise that the accessories market for these shiny phones is substantial. In 2014 it was over $40 billion.

In fact, the smartphone accessories market is predicted to reach a whopping $107 billion by 2022. According to Allied Market Research. Which is no surprise as smartphones sales are also expected to double over the same period. With high-profit margins of over 50% on many of these accessories, it’s not a market that can be ignored.

These accessories consist of power chargers and charging leads, selfie sticks, screen covers, protective cases, headphones/earphones, memory cards, batteries, power banks, portable speakers. The market is certainly growing in this era where products can be launched at a fast pace.

photo/Gerd Altmann

Why is the market growing so fast?

There are many factors causing the market to grow so rapidly, and these are as follows.

Increase in smartphone ownership

Smartphone ownership is growing as the biggest manufacturers are constantly developing new devices.

The cost of smartphones and the rise in smartphone manufacturers in an ever-crowded market has lead to more affordable handsets.

The fact that the urban population is expanding. According to UN statistics, 54% of the population resided in urban areas in 2014. It’s expected to increase to 66% by 2050 with developing countries such as China, Indonesia, and Brazil.

Better network coverage in these countries, will increase demand for these type of smartphones. This will also drive demand for the accessories to go with them.

photo/ Serendipityna on pixabay

Increase in disposable income

Recent research by Future Market Insights (fmi) states that in 2015, global disposable income increased by 3.1% as compared to 2014.

In developing countries there has been a rise in average incomes. This is due to migration of workers to the cities and a growth of the middle classes.

The expansion of urban areas especially in developing countries has seen new mega cities develop in places like China and India. The faster pace of living and need to communicate promotes consumerism of smartphones

Strong distribution networks

Globalization and cross-border trade has allowed the smartphones to make new inroads into both established and developing markets.

The ability so ship small lightweight gadgets around the globe at ever lower prices.

Online shops can afford to offer free or discounted shipping which is great for consumers and helps increase sales.

Proliferation of e-commerce sites

Today there are countless large online stores like Amazon and Alibaba. There are also plenty of independent accessories retailers such as made2b, Skinit, Casetify. This make access to accessories easier than ever before and offers a wider range and choice.

Competition from so many sites has not only improved quality but driven down the costs to consumers.

In a research released in 2016 by eMarketer, they estimated sales will top $27 trillion in 2020.

In the 2016 Pitney Bowes Global Online Shopping Study thousands of consumers in over a dozen countries were surveyed. The study examined e-commerce in three main areas. in-country (domestic)

online shopping, holiday shopping preferences and cross-border (international) online shopping.

The results of this survey showed that consumers from around the world enjoyed or loved shopping online. of those survey, the majority said it was a regular part of their routine. 94% of respondents said they made a domestic online purchase within the last year. While 30% said the by online daily or weekly.

This suggests that cross-border e-commerce is very important and as the report states, “is generally becoming a part of everyday life.”

Examining more in-depth mobile accessories research shows us that the protective phone cases account for the highest revenue. This is partly due to the high margins for mobile phone cases. This trend is nothing new, in 2014 it was the fastest growing sector of accessories revenues and the trend is much the same today.

It helps that phone cases are lightweight, easy to make and relatively cheap products. We can conclude these kinds of accessories, are very easy to sell online, especially in the cross-border e-commerce market.

They have distinct advantages over some other accessories and heavier products. The low price makes them good for promotions and impulse buys.

Also they outperform accessories with batteries such as power banks which are more difficult to ship.

Conclusion

2017 is following the same trends as the last few years. There has and continues to be many new releases in the mobile market mainly coming out of China. This leads us to a confident conclusion that like the smartphone market the mobile accessories market is only going to get bigger. As consumer spending increases in Asia, Africa, and South America we can predict these developing markets will see the biggest percentage of growth. So while today there are 40 million reasons to get into the mobile accessories industry I expect that to be more than double in the next 5 years.

At the forefront of this growth, there will be the lightweight products, with reasonable price, good margins, and great designs. Today chargers are the main selling item but close behind them are phone cases. It would appear that having a phone case to protect your smartphones against dirt and damage has never been so popular. So the custom phone cases market and wider accessories market offers a strong outlook for the future.

Author Bio

James is an avid tech enthusiast living in the City of Shenzhen. When not blogging about tech trends he is busy juggling a job in online marketing with taking care of his boisterous dog Charlie and launching a custom phone cases business, www.made2b.com

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