Growth in accessories to surpass smartphones

You’ve heard that smartphones are the growth area in mobile handsets, with actual numbers to support this development-long-sought by vendors seeking higher average selling prices and carriers seeking improved data revenue.
On a dollar-for-dollar basis, however, handset accessories will generate more revenue this year than smartphones, according to ABI Research.
Accessory revenue will account for about $32 billion globally this year, while smartphones will generate about $28 billion, according to ABI. The firm forecasts that accessory revenue will more than double in the next five years.
About three-quarters of the forecast accessory revenue will derive from discreet sales of “after-market” accessories-that is, those purchased separately from handsets. The other quarter will come from the increased value of handset sales that include “in-box” accessories.
Vendors and carriers alike are focusing on this growth segment because accessories typically carry high margins and serve to promote brands. Carrier interest, in particular, is driven by the fact that accessories offer consumers the opportunity to expand their use of their mobile handsets and service, leading to higher ARPU, the market analysis firm said.
Both Nokia Corp. and Motorola Inc. are pursuing the accessory market by emphasizing that the add-ons help subscribers fully utilize their handsets’ capabilities as well as allow personalization of one’s mobile use.
The rise of hands-free legislation in the United States and the increased popularity of mobile music, for instance, appear to have propelled the sale of Bluetooth headsets, in which Motorola, Jabra and Plantronics Inc. lead the way. Other accessory trends include the sale of external memory cards as handset vendors attempt to limit on-board memory capacity due to costs and the sale of carrying cases as handsets have become ubiquitous fashion items.