The smartphone accessories market - United States

1.2 The Global Outlook

The first variable we have to look at in order to assess the global market size and the potential of smartphone accessories is the evolution of the number of smartphones that were sold to end users in the world. Between **** and **** this number increased by more than ****%, representing an unprecedented and extremely fast growth. Even though in **** this market witnessed a slow-down partly due to the effects of the pandemic and partly due to the adjustment of a market which, in some country, has achieved almost complete penetration, the growth of this sector is still impressive. 

Number of smartphones sold to end users World, ****-****, in million units Source: ****

The global mobile phone accessories market stood at USD **.* billion in **** and is anticipated to reach USD ***.** billion by ****, at a CAGR of *.*% during the forecast period of **** to ****. In developing nations such as Asia Pacific and Middle East, because of growing population, the demand of mobile phones accessories is expected to boost further the market [***].

1.3 The US Market

Sales of wireless phone accessories to retail dealers USA, ****-*****, in billion USD Source: ****

The total U.S. consumer technology accessories market, including video, audio, imaging, wireless phone, video game and computing accessories, was projected by CTA to increase *% in ****, reaching $**.** billion. This is up from $**.* billion in ****. After ****, CTA predicted a steady increase by *% each year until ****, reaching $**.** billion in **** and then $**.** billion in ****.

Wireless phone accessories continue to top the accessories market, driven by strong demand for new smartphones. The most in-demand wireless phone accessories are cases, chargers and screen protectors. More in general, wireless phone accessories account for the largest chunk of the consumer tech accessory market by far, as shown in the graph below.

  Breakdown of the consumer technology accessories market, by type of accessories USA, ****, in % Source: ****

 “Overall for accessories, the big highlight was wireless phone accessories, which proportional to smartphone sales, is the largest segment in all accessories and carries a lot of weight across the segment,” says Richard Kowalski, CTA senior manager of industry and business intelligence.

1.4 COVID-19 Impact

The COVID-** pandemic has strongly impacted many industries, among which the smartphone one. In general, the uncertainties brought about by COVID-** are continuing to affect consumer buying confidence. US consumers are indeed still being more cautious and have limited their spending to essentials instead of luxury items.

Therefore, even if smartphones are not necessarily considered a luxury item anymore in the US, smartphones accessories, being complementary products, have been negatively affected by the crisis.

Nevertheless, even if this might be true for decorative and fashionable phone accessories, wearable electronics appeared to benefit somewhat from the emergence of COVID-** in ****, as many of these devices are able to track health data and provide users (***) with vast amounts of personal data, consistently tracking the user’s vitals [***].

COVID-** impact on tech products purchases, by product category USA, March-October ****, in share of households purchasing tech products Source: ****

In general, most tech product purchases at the end of the first wave of COVID-** and at the beginning of the second have been on a fluctuating trend. Headphones and earbuds sales have been the highest ones, even though remaining pretty much stable over the whole period between March and October ****.

2.1 Demand Characteristics

“What we’re starting to see is a lot” of revenue coming from new chargers, “especially wireless charging pads and associated wireless charging equipment including cases,” says Richard Kowalski, CTA senior manager of industry and business intelligence. “Along with that, portable battery chargers for phones are kind of a big item” because they’re so important for travelers and people on the go and were a popular holiday gift item in ****.

After all, when consumers buy a new smartphone, they tend to want to protect it, he notes. And new smartphones often can’t fit in the same case that was used for a prior phone as the size of these devices keep changing (***). Also when it comes to wireless phone cases, “some of the higher price points are the cases with batteries built in,” he points out.

For what concerns phone cases and protectors NPD conducted a survey to highlight the main reasons why US customers decide to purchase this product:

Lasting protection: This group of customers is usually looking for a solid and quality case that will protect their phone; Fashion and style: This group of customers places the highest importance on the aesthetics of the case; Practical fashion: ...

2.2 Demand Drivers

The expansion of the phone accessories market which has gone hand-in-hand with that of the smartphones themselves so far has been achieved by a perfect mix of technological innovation and demographic distribution. The first iPhone arrived in the United States to take full advantage of the existing network infrastructure, which for the first time had been developed for data traffic. This was the beginning of a synergistic and biunivocal technological innovation: on one hand, telephone operators quickly adopted networks designed to guarantee increasingly faster data speeds (***); on the other hand, brands quickly rode the wave by developing devices with features optimized for the growing need for connectivity. 

Together with the development of these devices, tech companies and other enterprises which gravitate around this industry started to complement the offer introducing different types of accessories and protective tools. 

For this reason, in order to understand the evolution of the market for smartphone accessories, it is imperative to look at the evolution over time of smartphones ownership and user penetration.

Smartphones Ownership

Percentage of adults owning a smartphone USA, ****-****, in % Source: ****

   Smartphone User Penetration Smartphone user penetration as a share of total population USA, ****-*****, in % Source: [***] The smartphone penetration is ...

2.3 Consumer Profile

Having established that the percentage of adults owning a smartphone is inevitably connected to the development and dynamics of the market for smartphone accessories, in order to establish a consumer profile, we can use the data provided by Pew, on the income, ethnicity, gender and age group of American adult smartphone owners.

Income 

From the graph below we can see how, as expected, ownership penetration for smartphones is greater and basically complete for the highest bracket of household income (***). For these household the ownership penetration for smartphones has indeed gone from **% to **% between **** and ****, showing how, nowadays, these devices are less and less considered a luxury as they have become a necessity. 

Percentage of adults owning a smartphone, by household income USA, ****-****, in % Source: ****

Ethnicity

The graph below shows us another important trend. In **** the differences between ethnicities in percentage of adults owning a smartphone has essentially disappeared, a trend that has been in act ever since ****. 

Percentage of adults owning a smartphone, by ethnicity USA, ****-****, in % Source: ****

Gender

With gender inequality in income starting to fade away and becoming unacceptable, it is only normal to note that in **** the percentage of male and female adults owning a smartphone ...

2.4 The most popular trend for phone cases: Print-on-Demand

The majority of the youth population chooses a custom phone case. This allows them to add their own talent, individuality and personality to a device that will be very much on display among their peers. 

One of the main reasons why this trend has been so successful in the US and why so many new companies specialized in this practice are emerging is the fact that print-on-demand can be considered one of the easiest, fastest and cheapest way to start an online business.

Moreover, although phone cases are trending towards saturation, they are still one of the best-selling print on demand products. In the United States, up to **% of smartphone owners use a protective case but, as mentioned, being the market extremely crowded, differentiators and value added activities such as print-on-demand are necessary to keep customers interested [***]. 

The main advantages of print-on-demand are:

Low investment (***): through personalization and print-on-demand, inventory problems almost disappear as products are designed only on-demand. Creativity and personalization: creators and designers can give space to their creativity in proposing different designs for the clients' requests. Production or delivery in most cases do not matter: most of the time, when setting up an online print-on-demand phone cases business, ...

3.1 Market Dynamics

The market of dedicated accessories for smartphones, polarized around the phone cases market, is a market with very low barrier to entry. Indeed, it is possible to position oneself quickly and without incurring high costs. The advantages of this market in its structure are the following:

The small size of the accessories makes it easy to keep stock and to ship; The manufacturing of shells, cases, poles, stands and screen protectors is relatively inexpensive; With extensive online distribution, starting online is just as realistic as starting in physical stores; As far as shells are concerned, printing on demand, following a bulk order, limits the risks at the start and favors margins;

But these many advantages, along with the explosion of the market from **** to ****, have made it extremely competitive. So, in the multitude of online and physical retailers that share the market, no one brand is really establishing itself as a sustainable leader [***].

3.2 Production

Industry Today provides some information on the production processes of some of the most important smartphone accessories, such as:

Cases and Covers: Polycarbonate and polyurethane phone cases are one of the most common types of mobile phone cases and are made by using an injection mold, which is made from some chromium steel bars. They are then merged together to form a block. This block is used to form a mold maker to shape the metal mold into a specific design. Once achieved, the plastic (***) is poured into the injection mold, creating the mobile case or cover. Each type of material is manufactured using unique equipment like a compression mold machine, a CNC machine, and a heavy-duty sewing machine for cases made from synthetic rubber, wood, and leather, respectively. Metal cases also utilize a CNC machine during the manufacturing process. Screen Protectors: Tempered glass screen protectors are manufactured using high-temperature ovens. Glass is heated to ultra-high temperatures, then is quickly followed by fast cooling. The temperatures are specific as it determines its strength and flexibility. Mobile Phone Grips: The manufacturing process for polyurethane and thermoplastic polyurethane-based phone grips is similar to the one used for plastic phone cases as it also ...

3.3 Revenues of the Main Pure Players

We have said that the market for smartphone accessories in the United States is extremely fragmented and almost saturated due to the many small players who compete in it. Excluding the large electronics companies such as Apple, Samsung and Huawei, who also produce these accessories as a complementary offer, we can identify the main pure players active in this market and their revenues.

Turnover of the main pure players USA, ****, in million USD Source: ****

4.1 Three Main Product Categories

Protective products

This category includes smartphones covers and screen protectors. 

Low-technology products that follow uses and trends

Accessories emerge according to trends and usually adapt to the evolution of American customs, like the POP support: POP support allows users to take pictures without taking the risk of dropping their smartphone. It can also be used as a support to watch a video or a series. It is also possible to attach two POPs to carry headphones. 

The use of accessible travel applications (***) has gradually replaced the GPS integrated into the vehicle. The suction cup car holder has therefore appeared to support these uses and is another example of low-technology products that follow uses and trends

High-end and innovative products  

These complementary products among which, headphones, mobile speakers, watches and bracelets connected, represent many product innovations that keep prices high and renew the market. 

4.2 Offer Typology

In order to have an idea of the preferences of American consumers when it comes to smartphone accessories, we are going to look at the sales and penetration of two different product categories: hearables and wearables. The latter, indeed represent an important portion of the market and include the most used types of high-technology smartphone accessories. 

Hearables

The preferred headphones of American customers are wireless earbuds (***), by far. Sales to dealers of these products, not only represent the highest revenues of this product category, but are also the ones that have grown the most over the past * years, increasing by as much as **.*% between **** and ****.  

With the rise of wireless earbuds and headphones, sales of wired earbuds and headphones have inevitably decreased symmetrically as these products are substitutes to each other. 

Breakdown of sales to dealers of headphones, by type of headphones USA, ****-*****, in million USD Source: ****

Most preferred true wireless hearable brands USA, ****, in % Source: ****

Wearables

Wearable smartphone accessories such as fitness bands and smartwatches represent the premium end of the market as a smartwatch of the latest generation, for example, can cost up to $***. As of ****, fitness bands were the preferred wearable smartphone accessory in the US, presenting ...

4.3 Pricing

The Consumer Price Index (***) category telephone hardware, calculators, and other consumer information items is part of the information technology, hardware, and services group under the education and communication major group. 

Having a look at the evolution of this CPI might be useful to have an overview of the information technology market in the US, in its broader sense.

Evolution of the CPI for telephone hardware, calculators, and other consumer information items USA, ****-****, base **** = *** Source: ****

As it can be seen from the graph above, the CPI for the above-mentioned category has been on a downward trend ever since **** indicating a progressive decrease in prices of the items included in it. This category includes prices from "stores which sell telephone hardware, accessories, calculators and other items; wireless phone company outlets, big box retailers, online retailers, and even kiosks in shopping malls sell at least some of these items".

4.4 Phone Cases and Screen Protectors Price Ranges

The market for phone cases and screen protectors is an extremely fragmented and crowded one. Only on Amazon, there are more than ** different phone cases and screen protectors brands with prices that range from $* to $***. 

For this reason, we decided to dedicate a section to this product category in order to understand its segmentation and price ranges. 

Source: ****

As the table above shows, different specialized companies present price ranges that do not vary much, even though some companies provide relatively wider ranges, starting from lower price points with respect to others.

5.1 Rules and Regulations

In the US mobile accessories are defined as products (***).

The country of origin is mandatory when selling products in the USA, including phone cases. Therefore, phone case sellers always have to make sure that their products contain a permanently affixed label indicating the country of origin.

If a company is importing phone cases that have a certain fraction of their surfaces made of leather in the US, they fall under the supervision of the FTC’s (***) Part **, which regulates the labeling of leather products with respect to:

Grade Quality Material content Thickness Serviceability Durability

For example, if all or a part of a leather phone cases are made of non-genuine leather materials, then it should be specified on the product labels or instructions that this product is not made of leather *use words such as not leather, imitation leather, simulated leather, vinyl, vinyl-coated fabric, or plastic).

Moreover, in the US, individual states have different statutes that set the levels of heavy metals such as lead, cadmium, and mercury allowed in packaging materials, dyes, and printing inks.

To determine whether packaging materials adhere to these standards, a third-party testing company such as Bureau Veritas, TUV, or QIMA must be contacted and the ...

5.2 Phone Cases and the California Proposition 65

California’s Proposition **, also known as the Safe Drinking Water and Toxic Enforcement Act, was first enacted in the US in the state of California in ****. It is intended to help Californians make informed decisions about protecting themselves from chemicals that could cause cancer, birth defects, or other reproductive harm.

Currently, the act has listed more than *** harmful chemicals that could be found in consumer products, including phone cases. Some examples of restricted substances are:

Lead Cadmium Mercury Phthalates

Due to the universality and the pervasiveness of California Proposition **, it is necessary that phone case importers conduct lab testing on their products according to the requirements of the proposition. Accredited third-party lab testing companies generally offer complete and integrated chemical testing services. This is a typical procedure before you have your phone case products imported to the US market. Most of the phone case manufacturers in China and Southeast Asia are not able to provide the California Proposition ** Lab test reports.

The cost of California Proposition ** lab-testing reports is generally $*** per material and color, but can be much higher depending on the individual lab-testing company and the quantity, quality, color or more specifications of the product.

Testing is not mandatory for ...

6.1 Segmentation

• Huawei
• Otterbox
• totallee
• Casetify
• mophie