Accessories Makers Also Preparing For Launch Of IPhone
Dow Jones
June 08, 2007: 04:10 PM EST
SAN FRANCISCO -(Dow Jones)- Griffin Technology Inc. researchers were among those paying rapt attention in early January when Apple Inc. (AAPL) Chief Executive Steve Jobs introduced Apple's iPhone cell phone.
The minute Jobs' presentation at Macworld in San Francisco ended, Griffin employees began working on a lineup of iPhone carry cases, screen protectors and other accessories that will go on sale on June 29, the day AT&T will begin selling the phone, said Griffin spokeswoman Jackie Ballinger.
Apple and telecom giant AT&T Inc. (T) aren't the only companies with a stake in the phone's success. Like Griffin, other accessories makers are placing big bets on the iPhone - and the resulting need for iPhone accessories. They include RadTech LLC of Earth City, Mo.; Marware Inc. of Hollywood, Fla.; and Belkin International Inc. of Compton, Calif.
Their payoff could be relatively huge, if the $1 billion a year spent on Apple iPod accessories is any indication.
Apple believes it can sell 10 million iPhones by the end of next year, and plans on having three million phones in stores on June 29. Meanwhile, the iPhone also will support most existing accessories for the iPod, owing to the fact that it's also a music player. This means accessories makers are catering to a rather large, and lucrative, audience.
But these companies' risk is potentially just as large as the possible payoff. IPhone accessory sales are expected to become a large chunk of their profits this year. For instance, maker Marware expects sales of iPhone accessories to make up 20% to 30% of overall sales this year, said Paola Zuniga, a company spokeswoman.
Yet despite their importance, Marware and other accessories makers say they began crafting iPhone items without the benefit of actually seeing the device. Apple, however, did release some basic specs about the iPhone in February, which made the process a bit easier.
The accessories makers, for the most part, operate independently of Apple, which raises their risk even more. Apple only requires that accessories with the phrase "works with iPhone" on the packaging first be approved by Apple. But in order to speed their goods to market, several accessories makers say they will go without the "works with iPhone" on their packaging.
Nonetheless, accessories makers say they're more confident with the iPhone because of the extra bit of lead time, a rarity when it comes to Apple. Jobs' speech at Macworld in January, where he introduced what is likely to be the most hyped of any Apple product, was unusual because Apple isn't known for unveiling its products so far in advance of their sale date.
Given the rare opportunity, accessories makers said they took advantage of the lead time, which also has the effect of ratcheting up the competition.
Some companies are already selling iPhone accessories. BoxWave Corp., based in Bellevue, Wash., is offering two dozen items, including an anti-glare screen cover for $13; an all-in-one charger for $26; an $18 device to synch iPhone's to other devices; and a "screen puff" for cleaning the device.
"Since the day the iPhone was announced, we've be working, coming up with ideas, creating," said Bollinger, the spokeswoman for the Nashville-based Griffin, which also makes the iTrip, an add-on to iPods that's become one of its biggest sellers.
"While we've been in communication with [Apple], we haven't had a unit, so we've been at times blindly going at it."
-By Ben Charny, Dow Jones Newswires; 415-765-8230; ben.charny@dowjones.com
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