High-margin accessory makers have high hopes for Apple's iPad

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Third party accessory companies have profited immensely from Apple's iPod and iPhone lines of products, and now they are preparing for next month's launch of the iPad with an assortment of products, including cases, chargers and more.

Analysts expect Apple to sell between 1 million and 5 million iPads in the product's first year, which is well below what the hardware maker ships each year in iPhones and iPods. However, some believe iPad owners will spend more on accessories because of the device's larger form factor and higher price point.

Mark Rowan, president of Nashville, Tenn.-based Griffin, told The Wall Street Journal that his company began drawing up designs for iPad cases within hours of Apple's announcement last month. The market for iPod and iPhone accessories that Griffin and other companies inhabit was estimated by investment firm Piper Jaffray to have a $3.7 billion worldwide value in 2009.

One problem for accessory makers preparing for a new product launch is actually getting their hands on the device. GelaSkins, which offers decorative sticker covers for mobile devices, said they intend to have a template for a product within hours of receiving the iPad. The company plans to offer a variety of products within a day via their Web site.

Jamie Elgie, director of product management for mobility with accessory maker Belkin, told BusinessWeek that he believes iPad accessories could be as big a part of their business as iPhone and iPod accessories. "It's going to be an incredibly important portion of our business," he reportedly said.

While consumers will undoubtedly want to protect their iPad investment, which will be at least $499, they'll have to do so at prices higher than they might be accustomed to. While most iPhone products from Scosche sell for between $15 and $35, the company's larger iPad stand will carry a bigger price tag, too, at $50.

BusinessWeek also noted that accessory makers typically sell their products with margins of 70 percent to 90 percent, making it a particularly lucrative business.

But those companies will also have to compete with Apple, which revealed its own accessories when it introduced the iPad last month. The hardware maker will sell a keyboard dock for charging the device and allowing keyboard input, a case that protects the iPad or allows it to be stood up for watching movies, and a camera connection kit that allows users to import photos and videos from a digital camera.


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