With Aftermarket Smartphone Accessories Accounting for 64% of Accessory Revenue, OEMs Turn to Smart Accessories to Gain an Even Larger Profit

While the shipments for smartphones have reached over 40% of all handsets, the shipments of aftermarket smartphone accessories account for 56% of accessory shipments and 64% of revenues. “With a large portion of the accessory ecosystem focusing on smartphones, handset and accessory OEMs are looking to make their accessory products ‘smart’ in an attempt to differentiate, extend brand, and increase revenues,” comments senior analyst, Michael Morgan. Currently the smart accessory ecosystem is dominated by health and fitness applications that are leveraging a combination of the GATT profile in Bluetooth v4.0, and low-power sensors made by leading IC vendors such as Texas Instruments.

ABI Research believes that leveraging the processing and software capabilities inherent in mobile devices in combination with hardware products will open a new vector for accessory OEMs looking to create differentiated accessory products. Furthermore, research into smart accessory products indicates that adding ‘smart’ capabilities to accessories can increase product ASPs by 30% to 100% over non-smart versions of the same product.

Smart accessories pose challenges for accessory OEMs who tend to have limited electrical engineering and software engineering skillsets. However, the need to differentiate their products and meet the challenge from new product innovations will eventually force many accessory OEMs to learn on the job. This new technology vector for accessories also poses an opportunity for IC vendors looking to expand their reach beyond the mobile device and handset market.

“The growing interest in smart watches, smart glasses, and wearable sensors will drive a need for processing power that resides outside of the smartphone. It will be imperative that IC vendors and accessory OEMs determine the best way to extend the use case of smartphones into the green field opportunity of smart accessories,” adds senior practice director, Jeff Orr.

These findings are part of ABI Research’s Mobile Device Accessories and Bluetooth Research Services.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 70+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.