Peripherals & Accessories – Coming to the Forefront

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With the emergence and further establishment of laptop market in the Indian region, the market potential and size for peripherals and accessories or attach products is showing tremendous growth opportunities for the channel as well as the vendor community.

As a result, accessory business is no more being considered as a side business, but is actually coming to the forefront and today it is a big and lucrative opportunity for the channel partners as well as vendors.

If we take a look back to the Indian market, in the last couple of years, the PC and the laptop market in India has seen an upward trend. As a result, the demand for the accessories that go on to add greater value to the PC or the laptop is also increasing.
According to the industry experts, the accessories market is worth over $60 million. Even though the rest of the industry is slowing down, the laptop or the notebook market is expected to grow at a healthy pace, making this an exciting time for the accessories space.
 
In order to tap this potential even vendors are laying specific focus on the product category. So, whether it is global brands like Logitech, Acer, HP, LG, Samsung or Indian brands like iBall, the accessory market is quite seriously been targeted today. The same fervour is seen within the distributor community as well. So we have national and regional distributors like Ingram Micro, Redington, Rashi Peripherals or Neoteric focusing on the segment. Belkin, a focused accessory player, is bullish about the Indian market as well.
 
 
HP, which floated its accessories business last year, has created a separate channel program for the same.
 
Accessories in India
 
Broadly, accessories include all products that are not part of the basic PC, but help enhance its performance, efficiency and convenience. Products that usually fall under the options category include batteries, bags, external hard drives, notebook stands and coolers, and input devices and speakers.
 
The Indian accessory market can also be categorized in another way: OEM vendors and third-party vendors. If you look at the present accessory market, third-party vendors contribute around 80 per cent of the revenue, while OEM vendors contribute the rest.
 
According to the research reports, in mature markets, customers spend about 25 per cent of the notebook value for buying accessories. In India, this figure has been much lower. However, with the average age of Indian notebook consumers going down day-by-day, and with their purchasing power rising, we have seen an increase in the demand for options.
 
PCs are no longer restricted to basic computing work. They can be easily turned into a home theater system, creative suite, or even a complex business machine. This multi-utilization factor has led to an increase in the demand for options such as speakers and external hard drives.
 
The exponential rise of the notebook market is due to the ever-changing and increasingly mobile lifestyle of consumers. Because of this, the need for ‘anytime, anywhere’ access to information is increasing. In the next couple of years the demand for notebook accessories will surge, with users placing a lot of emphasis on options which would increase their efficiency and make work a comfortable experience.
 
The sheer availability of the products is another reason for the expanding options market. Today, you have more brands that are easily available across different retail formats.
 
 Potential of the Accessory Market
 
Giving a sense of the vast opportunity for the accessory business in the Indian market, experts believe that India has a long way to go and the users of notebooks need to spend more time and effort in terms of developing the need for the right kind of accessory for their laptops and PCs. Assuming that there are around 10 million PC users in India, and that about 30 per cent of them go for accessories to enhance their computing experience or replace bundled accessories with new ones, the accessory market can be easily somewhere in the 3 million user range.
 
Even though Indian customers spend less than 10 per cent of the notebook price on options, this is changing. The upper end of notebook users in India is now spending significantly on accessories segment. Many customers spend close to Rs 5,000 in the first year of purchase itself. This guarantees substantial recurring revenues to the reseller; it also promises good profits. As a result accessory market is now moving towards the small cities as well. And many partners who were not dealing with accessories a few years back, have now become specialized partners and are earning higher margins.
Challenges Ahead
 
One of the major challenges being faced by the accessory segment is the inter-operability of the products manufactured by vendors and third-party vendors within this segment of business. Interestingly, the partner community seems to be divided on whether the products should be interoperable or not, the reason being that vendors often do not extend the warranty of the product if any harm has come to it through a product from another company.
 
Some globally well established vendors do not encourage its customers to use third-party products with its PCs. And as a result, if the customer goes ahead and uses a third-party product, then, these vendors do not cover it under their warranty schemes.
 
Moving forward, as customers become more tech-savvy and seek to enhance their computing experience, partners should witness a growth in the sales of accessory brands not only in big cities but also in smaller locations of the country. And as far as the new age technologies go, in particular, products based on new technologies—wireless peripherals, or those with proven Wi-Fi capabilities are set to gain popularity and mass acceptability in the coming months.