As Apple Inc. (NASDAQ:AAPL)’s market share in China declines, it’s having ripple effects throughout the smartphone case making industry. Smartphone accessory makers there are finding that they must now expand their product lines beyond Apple.
Bloomberg News reports that many accessory makers which previously relied on sales of Apple Inc. (NASDAQ:AAPL)’s limited product line are now having to spend more because of the push toward products made by other companies. Case makers told Bloomberg that business was simpler when Apple Inc. (NASDAQ:AAPL) dominated the Chinese market because the company had just one or two designs for its tablets and smartphones.
As the Chinese market shifts toward favoring a variety of models from Asian companies like Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and Lenovo Group Ltd. (PINK:LNVGY) (HKG:0992), case makers say they are finding it “too dangerous” to focus on Apple products only. Companies like Magic Kingdom, a China-based smartphone case maker, say although their costs have increased because they expanded their product line, their risks have also decreased because of their wider product lines.
Falling smartphone prices squeezing case makers
Apple Inc. (NASDAQ:AAPL) has also been plagued by falling smartphone prices, and this same issue is faced by case makers as well. Domestic-made handsets cost far less than the iPhone and iPad, and cases for those handsets sell for about a third of the cost of a case made for the iPhone.
Nonetheless, some case makers say they continue to sell cases for Apple’s products because the prices are higher. Companies like Shanghai Stella Industry Co., which makes the Funway iPhone cases, did not make cases for Samsung’s products two years ago. However, last year cases for Samsung phones made up 30 percent of the company’s sales.
The company’s chief executive officer, Hans Han, even told Bloomberg that Apple Inc. (NASDAQ:AAPL) “has no fresh ideas, no new designs.”
