iPod armbands

	Poler's PBS-M400A iPod portable battery station from mainland China has a Li-ion battery capacity of 1,000mAh/3.7Wh. It supports all iPod models.

Makers are joining or reentering the line in anticipation of renewed demand, stimulated by the latest portable electronic devices.

The rapid growth of the iPod and portable media player (PMP) industries in recent years has consolidated their allied accessories sector, attracting a huge number of manufacturers in mainland China, Hong Kong and Taiwan.

The development trend in iPod/PMP accessories in Greater China is expected to continue—but at a diminished pace after 2008. Hong Kong makers are already noting a demand slowdown early this year. Among the factors cited for this deceleration are the weak US economy and changing consumer purchasing decisions. The industry is also facing rising costs, intensifying competition, currency appreciation and intellectual property issues.

Despite these challenges, the supply base remains intact as new players replace companies that exited the line and as other suppliers make a comeback to cash in on new-generation iPods and the iPhone. Electronics and non-electronic accessories are offered, including docks, speakers and mini speakers, chargers, cables, earphones, FM transmitters, adapters, stylus pens and remote controls, as well as cases, pouches and skins.

To widen their product selection and stimulate sales, makers emphasize cosmetic design in their new releases or product modifications. The majority of interviewed suppliers have their own factories with varying manufacturing capability.

Some companies prefer to outsource front-end processes such as mold making, plastic injection molding and SMT, but all have product development departments, especially as their business thrust is oriented toward OEM and ODM. Contacted suppliers have monthly production capacity ranging from 30,000 units of a product to 3 million units of various accessories, and average monthly production at 50 to 80 percent of capacity. Output is mainly for overseas markets, primarily Europe, the US, Asia and the Middle East.

	The iPod-02 from Hong Kong's Hip Hing is a 4-pole 3.5mm stereo plug-to-A/V+S-Video cable assembly for the iPod.

Mainland China manufacturers of iPod/PMP accessories forecast continued growth but with not as high an expectation for the next 12 months. They concede that the weak US economy has a direct effect on exports, with the US being one of the largest markets for the line. In the last three years, the sector benefited from significant iPod/PMP sales, notably with a 50 percent production boost in 2007. More than 100 million iPods were sold based on Apple's data released in April 2007.

Aside from the US economy, domestic challenges continue to worry makers. These include increasing raw material and labor costs, the appreciating yuan and persistent intellectual property rights issues.

Spiraling oil prices continue to impact the costs of ABS and other plastics, PU, EVA, rubber, leather, crystal and silicone. While these have less of an impact on electronic accessories makers than those in the non-electronic accessories line, both segments face higher labor cost with this year's government-directed minimum wage increase. To counter these costs, some makers try to improve their production efficiency while others are considering a price increase. Due to fierce competition, the projected price adjustment will be within 5 percent. In view of the yuan's continuous strong showing against the US dollar, suppliers quote in euro or yuan instead of in US dollar as was the custom. Others align their pricing with the prevailing yuan-US dollar exchange rate on the payment date. As further protection for their competitive edge, some makers apply for patents before they release their designs.

In Taiwan, makers could only expect a steady growth path for the industry as consumers' decision to purchase a new accessory is no longer directly correlated to model upgrades. This, as most accessories are now more readily compatible with various iPod models. Nevertheless, they are hopeful that the release of the iPhone and iPod touch will generate buyer interest in the coming year. Despite the price competition, Taiwan suppliers are confident their new designs will win the market, especially in the midrange and high-end segments.

Hong Kong suppliers, on the other hand, have reported decreased activity in their iPod/PMP accessories lines as market demand has slowed since the start of 2008. They also noted that the release of the iPhone and iPod touch has not been able to inject new vigor into the accessories market. Few suppliers released accessories for the most recent releases from Apple, aside from cases, skins and pouches. Some have discontinued developing new iPod/PMP accessories altogether, except for ODM projects, in order to save on development cost. Their existing models, however, continue to be offered and are still available for volume orders.

Parco Pacific Ltd has scaled down the development and promotion of iPod/PMP accessories in recent months. "We wanted to test the market when we released our iPod accessories. But we discovered that buyers prefer the more high-tech accessories," said Candy Chan of Parco Pacific's sales department. Established in 1990, the company specializes in contract manufacturing for electronic and computer novelty and premium items. Hip Hing Cable & Plug Mfy Ltd expects a much lower total in shipments this year, from 100,000 iPod/PMP accessories in 2007, after orders reduced in volume during the first half of the year.

The iPod/PMP accessories industry has seen various supplier departures and new entrants but continues to be well-supported in number.

Mainland China's active supplier base is estimated at more than 300 companies, more than 90 percent of which operate at mass production level with relatively stable monthly volume. About 80 percent are private domestic enterprises, and the rest are Hong Kong-, Taiwan- or foreign-invested. This number saw changes in 2007, with the exit of suppliers of low-end products and the entry of new players producing mainly in-vehicle and travel iPod/PMP accessories. The release of the iPhone—seen as the industry's next growth driver—has encouraged the return of some companies, driven by a fresh resolve toward improved product development and production efforts.

Hong Kong has more than 50 suppliers, majority of which entered the line in 2006 and 2007. Many of them are small and medium-size companies that offer electronic or non-electronic accessories. Some makers provide one-stop-shop sourcing services for both accessory types.

Taiwan's supplier base gathers more than 150 small, medium-size and large suppliers that ensure the steady release of new models every quarter. More players are joining their ranks, especially those that produce docking stations, speakers and wireless transmitters. Interviewed companies have expressed optimism for the future of the industry, citing the popularity of the iPod series and the thriving PMP line. Aside from the iPod/PMP driver, makers count on other portable electronics such as mobile phones and MP3 players to fuel growth for the line as many of their accessories can also be used with these devices.

As with most electronic products, the center of manufacturing of iPod/PMP accessories for Greater China companies is in Guangdong. The province has a well-developed support structure covering material and component sourcing, manufacturing, and skilled labor. For non-mainland China companies, Guangdong offers a cost-down option that helps them control costs and offer competitive prices.

More than 80 percent of mainland China makers are based in the Pearl River Delta cities such as Shenzhen, Guangzhou, Dongguan and Zhongshan. This is also true for most Hong Kong suppliers. Among Taiwan suppliers, more than 70 percent own factories on the mainland, mainly in Guangdong. Their major product development activities, however, remain in Taiwan, which boasts design houses and IC suppliers.

	The F-022 A/V cable from mainland China's Shenzhen Koonhome connects an iPhone, iPod nano 3G, iPod classic and iPod touch to a TV or a home audio system. It is 150cm long.

Chun Lam Industrial Co. Ltd's 15,000sqm factory in Dongguan employs 500 workers and has the capacity to produce 500,000 iPod/PMP accessories a month. Its average monthly output is 400,000 units. The company has five years' development and manufacturing experience in the line. Its current focus is on developing environment-friendly products and highly differentiated cosmetic designs. Among its new releases is the CL-02327-iPod nanoIII brass case for the third-generation iPod nano that features a gemstone-studded cover. It is available in various colors.

Poler (China) Co. Ltd has a monthly capacity of 30,000 iPod/PMP chargers at its 20,000sqm and 400-worker facility. Among its releases is the PBS-M400A iPod portable battery station with Li-ion battery capacity of 1,000mAh/3.7Wh. It supports all iPod models. Poler also produces iPod/PMP speakers, docking stations and multifunction USB flash drives, among others. The company is looking at boosting its monthly capacity by 50 percent in the next six months. It sets aside 2 percent of total sales for product development, which focuses on cosmetic design.

Shenzhen Koonhome Technology Co. Ltd began manufacturing iPod/PMP accessories in 2003 at its 4,000sqm factory in Fuyong, Shenzhen. It has 450 workers and six production lines equipped with SMT, CNC and MC machines. Its product selection includes iPod FM transmitters, iPod/PMP mini speakers and iPod/PMP A/V cables.

The maker can produce about 3 million iPod/PMP accessories with monthly output at about 1.5 million units. Its 35-engineer product development team constantly works to update cosmetic design and improve quality in terms of reliability and performance. The company plans to release a full-function FM transmitter and docking station that can be used with the iPod and iPhone. Its F-022 series A/V data cable is compatible with the iPod touch, classic, nano 3G and other older iPod models except for the shuffle series. It can be customized for use with the iPhone.

Sun-Rise (HK) Industrial Co. Ltd offers iPod/PMP cables, chargers, cases, adapters and FM transmitters. Its monthly capacity for iPod/PMP cables is 100,000 units. Although the company has no capacity expansion plan, it continues to invest about 4 percent of total sales in product development efforts, which mainly focus on value-adding features. A recent release from the company is the SR-UD-01 iPodcable, which is made of environment-friendly materials. It can also be used with the iPhone.

Zhongshan K-mate General Electronics Co. Ltd has been specializing in iPod/PMP accessories since 2003. Its 6,000sqm factory is equipped with SMT and various testing devices, including a spectrum analyzer, audio analyzer and 8852 Bluetooth testing apparatus. It employs more than 450 workers and has six production lines mainly for iPod/PMP chargers, earphones, speakers, cables and FM transmitters. Its monthly capacity is 500,000 units and monthly output is 300,000 units. Among its charger models is the TC-13 iPod travel charger, which has a low-power chip and is compliant with the European Union's green standard.

Zhongshan K-mate plans to release a folding USB car charger and two transmitters, including a Bluetooth model.

Hong Kong's Hip Hing supplies iPod car chargers, AC/DC adapters, A/V cables, remote controls and docks. It has a production capacity of 2 million units per month. Established in 1986, the company employs more than 700 workers at its ISO 9001:2000-standard 50,000sqm factory in Dongguan. Continuous investments in automation have enabled the company to reduce its workforce. The company performs total in-house production from tooling and plastic injection to integrated cable manufacturing and packaging. More than 100 workers perform multiple phases of QC testing. The maker invests 30 percent of its annual revenue in R&D. It has 10 R&D engineers. Aside from iPod/PMP accessories, it also manufactures cable assemblies and car chargers.

Parco Pacific can produce up to 300,000 units of any accessory per month. It has a 6,000sqm factory in Dongguan, which is certified under the ISO 9001:2000 standard. The plant is equipped for mold design, tool making, plastic injection molding, and testing using ultrasonic and ICT machines from Taiwan and Japan. It also has silkscreen, pad and offset printing workshops and spray-painting machines for logo printing and special designs.

The company processes customer requirements entirely in-house for tighter control over quality and the production schedule. Its workforce fluctuates from 100 during the low season to 300 during the peak production season. It has about 20 staff in charge of developing new designs and products.

Taiwan-based Lee Yang Investments Ltd (Grandmax) supplies armbands with earphones for iPod devices and the iPhone. It also offers mini speakers for iPods and PMPs. An associate of cable assembly manufacturer Y. C. Cable Co. Ltd, Lee Yang is responsible for the design and marketing of the head unit's A/V products, such as earphones, cables, retractable cables and speakers. It markets its own Grandmax brand.

Songtak Technology Co. Ltd, which offers a series of stylus pens that are compatible with the iPhone and iPod touch and other devices with capacitive touch panels, is a dedicated manufacturer of PDA/smart phone accessories. The company considers strict QC as its strong point, boasting RoHS-compliant products that all undergo testing before delivery. One of its business units is involved in the development and production of GSM and WLAN antennas for wireless applications.

Twinwin Technology Co. Ltd's core competence is in RF wireless technology for A/V applications. The company supplies Bluetooth iPod transmitters, FM transmitters and car multimedia A/V boxes. R&D-oriented, Twinwin employs product development engineers that make up half its workforce. Partner factories handle production. The company was established in 2003.

The iPod/PMP accessories industry in Greater China is driven by a largely OEM/ODM client base overseas. The US and Europe remain their major markets, followed by Asia and the Middle East.

Mainland China companies in this report vary in their export ratios. Chun Lam exports 40 percent of its output, Zhongshan K-mate ships 50 percent and Shenzhen Koonhome about 60 percent.

At Sun-Rise, exports account for about 80 percent of total sales. Europe is the company's main overseas destination with 40 percent share of exports, followed by the US with 25 percent; the rest are sent to Central America, South America, Asia and Africa. OEM sales represent 80 percent of Sun-Rise's total revenue and ODM sales, the remaining 20 percent.

Poler ships its entire iPod/PMP accessories output overseas, 55 percent of which come under ODM orders and 45 percent under OEM. The US is the company's largest market, accounting up to 80 percent of total export sales. Europe follows with 15 percent share, and Africa and Central/South America for the remainder.

Hip Hing exports its entire output of iPod/PMP accessories. Its main export markets are Europe, the US and Japan. "Despite the economic crisis in the US, the orders from our clients there remain steady," said Vincent Tso, senior sales manager at Hip Hing. The company mostly caters to OEM and ODM clients. It requires a minimum order of 1,000 units. Hip Hing's products are mostly CE-approved. Some of its models have also received E-mark certification.

Under iPod/PMP accessories, Parco Pacific exports about 5,000 leather cases, 6,000 A/V cables and 20,000 mini speakers annually. It sends at least 70 percent of its output overseas, primarily to Turkey, India, Russia and the Middle East. The company also has customers in Europe and the US. Its customers come from the retail and premiums markets, with the former accounting for 20 percent and the latter for 80 percent of total shipments. Parco Pacific provides customized logos and packaging services, shipping products in retail-ready packaging with the clients' brand, or in bulk or white box packaging for products printed with company names or logos. Orders are shipped within seven days of sample approval. Whenever required by its customers, Parco Pacific also engages in trading activities.

Most Taiwan makers are export-oriented, with overseas shipments ranging from 80 to 90 percent of production. Their major export markets are Asia, Western Europe and North America. These suppliers focus on OEM, ODM and private-label businesses. Lee Yang, which has its own brand, also welcomes OEM/ODM orders. Its head company has factories in mainland China, Taiwan and the US. Songtak exports to Europe, America, Asia and other regions.