Jul 30, 2007 (10:07 AM EDT)
Multimedia Is Driving Handset Accessories Market

Read the Original Article at InformationWeek

The popularity of mobile phones with music and video capabilities is driving the handset accessories market, which is expected to generate more than $32 billion in revenue this year, a market research firm said Monday.

Items such as headsets, memory cards for storing content, and data-connection kits for linking a smartphone to a PC are expected to account for more than half of the accessories market this year, ABI Research said. The market as a whole is expected to grow steadily over the next five years, generating more than $80 billion in 2012.

"Expanding multimedia features in handsets are the most important factor contributing to the growth of the mobile phone accessories market," ABI analyst Shailendra Pandey said in a statement.

In addition to batteries and chargers, mobile phone vendors are increasingly providing earphones and data-connection kits in-box with handsets to increase sales of their high-end, feature-rich mobile phones and smartphones, ABI said. Wireless operators also are happy to see more accessories being provided in-box, since they help to generate use of nonvoice services, which means additional revenue.

Aftermarket sales of accessories also are seeing strong growth, which is resulting in many new players entering the market, ABI said.

Revenue from smartphone sales leaped 10% in the first quarter of this year compared with the fourth quarter of 2006, according to Infonetics Research. Sales of dual-mode phones, which are capable of accessing cellular and Wi-Fi networks, are expected to increase at a compound annual growth rate of 31% between now and 2010, topping $145 billion in the next three years.

Besides reducing the amount of minutes on the cellular network, Wi-Fi access provides a broadband connection to the Web, where handset subscribers can download video and music and access services.