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Two Thirds of All Mobile Phone Accessory Revenues Come from Aftermarket Sales

According to a recent study from ABI Research, sixty six percent of revenues earned from mobile handset accessories are generated in the aftermarket. This percentage is only expected to grow with time, following a market trend to move more and more accessories “out of the box” and onto retailers’ shelves.

“Mobile operators and mobile phone vendors see that the only return from including a subsidized accessory included in the handset box is customer satisfaction,” comments industry analyst Michael Morgan. “While that isn’t without some intangible value, on the retail shelf an accessory is a high-margin product that will generate actual income.”

Because of that, aftermarket accessories will also show faster growth rates than those included “in-box.”

The currently most popular aftermarket accessories are memory cards and protective silicone carrying-cases or sleeves. Both result from the popularity of smartphones: their multimedia capabilities often demand extra memory capacity, and their high value encourages owners to take better care of them. This latter trend has clearly been initiated and driven by Apple’s iPhone.

Protection takes on even greater importance in some emerging markets, where most owners intend to resell their phones when they upgrade. Other regional factors in the accessories market are culturally determined, says Morgan: “While the belt-clip style of handset ‘holster’, for example, is popular in North American and Western European markets, Asian consumers tend to prefer wrist- and neck-straps which provide greater visibility for the phones of the fashion-conscious, at lower cost.”

Fast-growing accessory groups include Bluetooth headsets and wired headsets for music listening, while others such as add-on GPS receivers are in decline as their functions are progressively moved into the handset itself. [ABI Research]

Mobile Phone Sales Will Reach 1.28B in 2008

By Sue Marek

Research firm Gartner says that worldwide mobile phone sales will top 1.28 billion units in 2008, an 11 percent increase over last year. Handset sales reached 294.3 million in first quarter 2008 and the analyst firm expects sales in the second quarter to be between 300 million and 305 million. For the third quarter, Gartner expects a slight increase in sales over second quarter but only slight because both Motorola and LG issued warnings about a sequential drop in sales.

Gartner predicts handset makers will rely more on emerging markets to reach their growth projections. The firm expects Asia-Pacific to have a 17.9 percent increase in mobile phone sales in 2008 reaching 472.5 million. Meanwhile, Western Europe will experience a 1.5 percent decline from last year to reach 188 million in sales. North America will have a decline of 5.3 percent to reach 185.7 million in sales.

Avian Securities analyst Matt Thornton concurs with Gartner. He believes that mobile phone sales will reach nearly 1.3 billion units in 2008 and average selling prices (ASP) for phones will decline 8 percent year-over-year as sales shift to higher growth emerging markets. [FierceWireless]

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