'Podcessory' market hits 1,000-product mark

The market for iPod add-ons, already booming, is starting to show signs of maturity.

That was clear from the number of 'podcessory' makers at the Macworld Expo in San Francisco last week. (Watch News.com's video from Macworld.) But it's also apparent at the nearest high street electronics shop, where a significant amount of shelf space is devoted to all things iPod. And it's not just tech-oriented retail. Gear for the iPod can be found at the supermarket and in some of the world's priciest boutiques.

It's a far cry from a few years back, when a handful of upstarts had the market sewn up.

"The bar has been raised," said Brian Baucom, director of marketing for Digital Lifestyle Outfitters, a company that makes nothing but iPod gear. At one time, a smattering of companies, such as DLO, Griffin Technology and Belkin had the market largely to themselves. Now, Baucom said, there are more than 200 rivals.

But along with the increased competition has come a continuing surge in the market. Researcher NPD says the market for podcessories topped $850m last year, not counting gear sold over the Internet.

And sales of the player itself have continued to skyrocket, meaning there's no reason the accessory business can't double this year, according to NPD analyst Stephen Baker.

The result is that the tiny companies that became overnight successes with cases and car stereo adaptors are now big operations.

Gary Bart got into the podcessories market in 2002 when he stitched together his first prototype case. Now his company, XtremeMac, has 60 employees and a huge 150-square-metre booth at Macworld with a snazzy new logo and tagline: 'The iPod Xperts'. The company plans to double the size of its booth next year, and the only vendor with a booth that size this year is Apple itself.

Many of the bigger name PC accessory makers have also launched iPod gear. Belkin was an early leader, but others such as Kensington, Targus International and Logitech have also added a range of podcessories. And Baker says the broader players have an advantage.

"They can leverage a whole relationship with the retailer across a range of accessory categories that guys like DLO, Griffin and XtremeMac can't," Baker said. "Those guys have to be more nimble and unique to be able to compete."

More and more, Baker said, the podcessory market will become a standard retail business. But US retailers from Target to Urban Outfitters love the products, with their 20 to 50 per cent profit margins. The products are particularly appealing to electronics stores, which make relatively little from the sale of the player itself, Baker said.

To stay ahead of the curve, all the makers are in a constant battle to one-up both their competitors' products and their own offerings. For instance, speaker maker JBL's latest creation is the 'JBL On Time', a $299 (£170) device that combines an alarm clock, iPod dock and speaker system.

The first iPod alarm clock, the $99 (£55) iHome, has been a hit, filling a niche that the speaker makers had somehow missed. JBL is hoping its product, with dual alarm and higher-end speakers will also find a place on the digital bed-side table.

Apple itself has been getting in on the act in two ways. The iPod's creator has slowly started to add more accessories of its own, from the iPod socks in 2004, to the armbands and silicon 'tubes' Apple launched with the nano last year, to the £35 FM radio/remote that Steve Jobs showed off on Tuesday.