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iPod gizmos

Marketplace Staff Aug 7, 2006

iPod gizmos

Marketplace Staff Aug 7, 2006


MARK AUSTIN THOMAS: Having an iPod is like having a pet. How? Well, because of all the stuff you have to buy for it. If you have a dog you need a collar, a leash, a toy bone, etc. Well, I’ve got three iPod’s and I can tell you that it gets expensive buying the covers, the arm band for the Shuffle, and on and on. Today, when Apple CEO Steve Jobs addresses the faithful, there’s a rumor he may announce a new version of the iPod. Marketplace’s Brett Neely says that will be “sweet music” for a brand-new industry that provides all those cool accessories.

BRETT NEELY: Whenever Steve Jobs announces a new iPod, he plays it down as no big deal.

STEVE JOBS: But there is one more thing . . .

But for the companies that make accessories for iPods it is. Think cases, car chargers, speaker systems that plug into the music player.

It’s a market that some analysts estimate is worth nearly a billion dollars a year.

Gavin Downey runs the accessory business for one of the industry’s biggest players. It’s a California company called Belkin.

GAVIN DOWNEY: People really look to personalize their iPods, for every iPod sold the number of cases sold has continued to skyrocket. It has about a 40 percent attach rate.

In English, a 40 percent attach rate means consumers snap up four cases for every 10 iPods sold.

Downey’s market research says iPod consumers spend on average about $110 buying extra stuff for their new toys.

But it’s not an easy business to be in. Apple reveals nothing about upcoming products to outsiders. Ever.

Apple doesn’t want competitors to get a whiff of what they’re up to, so, Downey’s staff has to read the tea leaves.

DOWNEY: You keep your ear to the ground in terms of components.

That helps Downey figure out things like the size and capabilities of new products.

Ted Schadler’s a technology analyst with Forrester Research. He says once Apple speaks, accessory makers jump.

TED SCHADLER: Usually people have a year, six months or three months to plan for their next product launch. Here we’ve got a turnaround of weeks in order to get product to market.

In some cases, it’s just days.

Jim Scherrer runs a small accessory company called Pacific Rim Marketing with his brother. Right after the iPod Nano was released, he noticed that the device scratched easily.

Scherrer figured there was money in selling lots of transparent covers.

JIM SCHERRER: We found the manufacturer in the morning, made friends with him in 10 minutes. Fed-Exed him a Nano and told him what we needed.

And within three days, they were selling the Opticover Scratch Protector on the company Web site.

Jim’s brother, Fred, lives in Asia where he oversees the manufacturing. They speak at least four times a day, starting at about 4 a.m. in California

The brothers use Apple’s built-in video chat software on their PowerBooks to show each other product designs.

Jim says running the business together has worked wonders for their relationship.

SCHERRER: Yeah for about 15 years we really never talked, we might see each other every three or four Christmases. And this, you know, brought us all back together.

If Apple does release a new iPod later today, the brothers say they’ll start designing their new cases immediately.

In Los Angeles, I’m Brett Neely for Marketplace.

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