In this blog post, I will not be reviewing individual cases, but I will be reviewing the different partnerships made and actions taken by individual companies in order to enter and thrive in the phone accessory market. While phone sales have been increasing decade after decade, so has the market for phone cases to protect those phones being sold. “Mobile phone accessories revenues are expected to total US $66 billion in 2016, up from US $62 billion in 2015. Surging smartphone sales, especially in developing economies, coupled with the launch of new, technologically advanced accessories is driving the global market”(Future Market Insights). This market has been expanding and not just in the United States. The prices charged in the US are far too high for everyone in the world to pay, so Asia, a developing country, jumped on the opportunity to use their low production costs to their advantage.
To consumers in the United States, these low prices are very appealing. For example, a standard case sold from China can be purchased on Amazon for about $5. A name brand case sold in the United States from the Verizon store costs anywhere from $30 to as much as $50 (excluding charging and waterproof cases). As you can see, these cases are highly overpriced but people still buy them.
When companies enter the phone accessory market, in order to be able to sell the cases at the marked up price, they partner with wireless phone companies to put sell them out of their stores. For example, Apple stores have a wall of phone cases in the back of case brands that have partnered with Apple for advertising. This is the process people go through when buying a new phone and why this business tactic works so well:
You purchase the phone and if you just purchased it, that means that you do not have a case to protect it and since people’s lives revolve around their phone, they think that they must buy a case then and there in that moment. So, they decide to buy a case from the oh so convenient 7 story shelf of $40 cases right next to them.
The convenience this wall of cases provides masks the price of the case that is being bought by the consumer. Even though these cases are marked up so high, they are being made for much cheaper in China. It seems as though in order for a case company to thrive, they must get their products in phone stores for the convenience of buyers that need them. Simple supply and demand.
This process increases the competition because a phone store can only hold so many brands on their shelves. I believe that the top rated case brands get priority over less popular brands but they just came out with Under Armour phone cases. Under Armour uses their target audience of athletes to sell their line of phone cases, “exclusively available at Verizon, the Under Armour Protect Series is the only case and mount collection built for the athlete and up to the challenge of the toughest workouts”(PopSugar). Under Armour has entered the phone accessory market because they know that if their apparel sells to athletes, they would want a phone case to be able to be alongside them in their fitness driven lifestyles.
With all of the marketing fluff that is presented to the consumer, it is hard to block out the temptation to purchase these overpriced cases for our phones.
Although the big companies are taking advantage of us and it would be amazing if we could put a dampener on their success, but the cases they make are much higher quality than the ones that are imported from China.
If you know you are going to buy a new phone, do a little research on what case you would like to have on it beforehand in order to keep your wallet from crying. The case can still be a big name brand case, but I recommend not buying it at the store you purchase your phone because those prices are marked up from the already marked up price based on convenience. I know there is an aspect of status quo for this process because everyone wants the new hottest case for their phone, but in reality, that doesn’t matter. The phone accessory market will always be growing as long as technological advancements are still being made, so there is no need to succumb to the temptation; In the end, just buy smarter.
Starting your own business would be easy if you import your products from China because the profit margin would be substantial. The tough route would be trying to create a partnership because that is where the safe and long-term money lies. A partnership with a large company gets your company name known by consumers who want to buy and provides income to your company. Although importing cheap cases from China and selling them in the United States would be easier, in the long run, your company will not last in the phone accessory market. Unless your product is unique and different, a partnership is the best way to get your business rolling.