Study: Memory cards to dominate cellphone accessory sales

Memory cards are proving to be the largest revenue generator of all mobile handset accessories, despite shipping fewer units than other accessories like chargers and batteries, according to a new study from ABI Research.
The overall accessory market is valued at $58 billion, said ABI.
The memory-card market is driven by photo, audio and video demands on increasingly media-centric handsets and smartphones. ABI predicts the market will see a 17% compound annual growth rate in shipments through 2013.
“Of all accessories, memory cards deliver the best revenue return,” said analyst Michael Morgan. “In fact, as production has outstripped demand the market is currently oversupplied, leading to a 60% year-over-year fall in per-megabyte prices. However, the memory capacity of the cards being sold is always increasing, and the resulting higher megabyte volumes more than offset the decline in average selling price.”
The report noted handset makers have typically added low-capacity cards into smartphone and media products, but carriers would rather sell high-capacity cards separately.
“The challenge for mobile operators is that subsidizing handset accessories means losing some of the high margins that they earn through the sales of these products,” said Morgan. “But subsidies also mean that many more subscribers will have handset accessories such as memory cards, and will be more likely to use mobile music services or download songs, leading to higher data ARPUs (average revenues per user) for operators.”