From carrying cases to hands-free ear pieces, wireless accessories address everything from
convenience to fashion – and sometimes necessity as well.

Kuperstein: Bluetooth has crossed over from novelty to mainstream.

It wasn’t that long ago that people took a second look when they saw someone walking around an airport, shopping mall or grocery store while seemingly talking to him or herself. Those little headsets have come a long way.

That “little” business known as cell phone accessories is not so little anymore. Cell phone accessories are a $1 billion-plus business per year in the United States, according to a Yankee Group study, growing 10% to 15% each year. As people buy replacement phones rather than first-time products, they know from experience they’re going to need an extra battery or car charger. Still, some industry veterans say a whole lot more money could be made in the accessory space if only more sales associates were properly trained and motivated.

BLUETOOTH REIGNS
Bluetooth has been around for years, but it’s still all the rage because it enhances a person’s lifestyle, says Verizon Wireless spokeswoman Brenda Raney. Many people use headsets when they’re in the car, and a Bluetooth headset makes it convenient as they move around, run errands and listen to music or talk. “It’s a convenience that’s moving more into the realm of necessity,” she says.

Arm bands and dog tags are part of the latest in accessories, allowing consumers to hold their devices and control their music.

Indeed, Wireless Toyz saw some of the strongest interest in Bluetooth this past year, indicating it crossed over from the novelty device for early adopters into a mainstream product, edged along by laws around the country requiring drivers to use hands-free technology, notes Gregg Kuperstein, president and COO at Wireless Toyz, which operates in 23 states.

Jabra claims the title as the first to market with a Bluetooth behind-the-ear style device that is so commonplace today. It has seen the market go from one geared toward on-the-go professionals who needed a hands-free alternative to a more mass-market phenomenon. More people are buying headsets when they make their initial handset purchases, and the awareness, combined with lower price points, are helping drive adoption, notes Robert Douglas, director or North American consumer channel marketing at Jabra.

Another early bird in the Bluetooth technology space, Parrot’s bread-and-butter business is Bluetooth systems for cars, but it also offers imaging and sound system products. One of the big sellers for Parrot is a 2 W speaker that can be clipped to a car visor and charged overnight or carried during errands.

The company sees a big spike in business in the fourth quarter and another spike in the first quarter as people stock up on accessories for their new phones. But it also expects to see some growth in July when laws like those in California kick in requiring hands-free technology for drivers.

FASHIONITAS WELCOME
While convenience and safety drive accessory adoption, the other big trend is, of course, fashion. To wit: Verizon Wireless last month announced it had teamed up with apparel company Paul Frank Industries to create a line of PDA and mobile phone cases and pouches. The accessories feature Paul Frank’s characters and whimsical designs, like Julius the monkey. It’s another in a long line of wireless companies, including handset makers, hooking up with fashion icons. Sprint Nextel last year lined up Stacy London of The Learning Channel’s “What Not to Wear” and “Fashionably Late with Stacy London” to create a 5-question online quiz designed to help consumers discover their “true mobile style.”

Simmons: New fashion designs include metallic and anything beaded.

In line with cell phones and accessories as fashion statements, CellKeeper, which started after founder Worth Brown developed a prototype carrying case he could use while walking his dog, offers three different styles in seven fabrications but plans to add more fashion-trendy products. The company is looking at fashion trends in 2008, with an eye toward more metallic and “anything beaded or with stones,” says CellKeeper’s business manager, Sara Simmons, who earned her degree in fashion design. CellKeeper is one of the many accessory companies attending the Consumer Electronics Show (CES) this month.

Simmons admits there is a lot of competition in the carrying case category, but there also are millions of people carrying cell phones. Plus, other consumer electronics goods, such as iPods or digital cameras, can fit into the CellKeeper cases. In today’s multigadget society, more people want various ways to carry their devices, whether over the shoulder or around the waist, which the CellKeeper product offers. “There is competition, but we feel that our product is unique and different from what’s already offered,” she says.

TRAINING REQUIRED
A lot of accessories, such as carrying cases or headsets, require little or no training on the part of sales associates. But data cards are another matter. They’re listed among carriers’ available accessories, yet they aren’t being sold very well, says Ray Williams, vice president of field operators at The Edmond-Howard Network.

Lost income from unrealized data card sales is a serious problem in the industry, he says. Finding a properly trained sales associate is difficult, if not impossible. Recently, a large U.S. carrier engaged Edmond-Howard to increase data card sales. The firm trained 75 of its own contract sales people in the data card selling process and deployed them to the carrier’s stores in three major markets. The result: Data card sales increased more than 400% in some stores. “Carriers and dealers need to train their sales associates in wireless data card sales just as we did,” Williams says.

Parrot prides itself in taking a “soup-to-nuts” approach, providing everything from chipsets to product designs. About half of its employees are engineers, says North America President Ed Valdez. Beyond hands-free car kits, the company offers digital photo frame and sound system products.

In-store sales associates at Wireless Toyz are regular users of new phones and accessories. “They get pretty geeked up about them,” Kuperstein says. It’s becoming even more important to cycle products among staff as end-users increasingly come into stores armed with information they’ve already gleaned from Web searches. After all, as Kuperstein notes, the higher-end accessories are not $10 gadgets but sometimes cost nearly as much as a phone.

Parrot developed online training modules that are “short and sweet” and give sales associates in big box stores what they need to know about its products, according to Parrot’s North American president, Ed Valdez. In fact, Circuit City ran a promotion on Black Friday on a hands-free car kit and wanted to see how much traction stores could get when the sales people were trained. The results exceeded expectations. “Without the training, we wouldn’t have done as well,” Valdez says.

Interestingly, feedback from Wireless Toyz’ in-store associates shows people are not waiting to buy expandable storage cards when they purchase higher-end phones with camera, music and video capabilities, as was the case historically, according to Kuperstein. Instead, they’re buying the items when they get the new phone. More often, they’re also picking up car chargers.

As both sales associates and consumers get more educated on wireless, the accessories business should enjoy even more successful days to come.