How New Smartphones Boost Sales of Old Accessories
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When a smartphone launches, it's logical to expect accessories designed for the new phone to fly off the shelves. Accordingly, demand should drop for accessories made for previous models.
But sales of older inventory are actually booming, fueled oddly enough by new phones from Apple, Samsung and Motorola, according to mobile accessory companies.
After the iPhone 6 launch, sales jumped for the older iPhone 5c cases, said Andy Fathollahi, CEO of protective case-maker Incipio. He forecasts up to a 30 percent jump in 5c cases sales in the coming months.
"We expect to see this boost continue through the holidays,"Fathollahi said.
Other companies are also anticipating growth for older gear. Case Logic is gearing up for a 15 to 20 percent sales spike for its iPhone 5 cases in the next eight weeks, said Tim Shonk, director of retail sales.
Screen protection manufacturer Tech Armor has already noticed positive gains. Sales of its iPhone 5s and 5c screens grew 20 percent following the iPhone 6 launch, according to senior product manager Jeff Wilcox.
What’s going on?
The surge in demand for older accessories is being driven by what Fathollahi calls a conversion period.
"Years prior, people were switching from a flip phone to a smartphone—that was the adoption period, not conversion," Fathollahi said. "Now, everyone owns smartphones and it's device upgrades that are driving sales."
Two-thirds of mobile subscribers own smartphones, according to media research firm Nielsen. That means more customers upgrade to newer smartphone models than buy one for the first time.
Conversions are also stemming from smartphone users leaving one operating system for another, such as Android users switching to iOS.
These converters are budget conscious, said Fathollahi, and are averse to the latest—and more expensive—smartphone models, preferring to upgrade to the next-best. For instance, an iPhone 4 owner may opt for the 97 cent iPhone 5c at Walmart instead of shelling out hundreds for the iPhone 6.
And since three-quarters of smartphone buyers purchase at least one accessory as well, according to research firm NPD Group, these next-best upgraders are creating a new customer base that boosts sales for older accessories.
"Customers come in and upgrade their hardware to just one level. And they leave with a case or two," Shonk said.
Banking on the conversion wave
Casemaker Speck is targeting converters by investing in new designs for iPhone 5 and Samsung S5 cases. In a few weeks, the company will release new colors for iPhone 5 cases.
"Our company's growth comes from innovating the function and design of old cases," said Speck spokeswoman Lindsay Anne Aamodt. "We want to make upgraded phones feel fresh and new."
Companies expect to ride out the current sales wave through the holidays, when they expect more accessories to be purchased as gifts. But in the long run, Aamodt said, another conversion wave will come and many iPhone 5 owners, now content with their device, will upgrade.