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November 11, 2009

Mobile accessories worth $55 billion in 2009

Mobile handsets now bundled with memory cards

Lexton Snol

By the end of 2009 the world's mobile handset accessories market will have chalked up a value of nearly $55 billion. That represents a small decrease from the 2008 figure, surprising only in that the decline hasn't been larger.

"While improving slightly," says ABI Research industry analyst Michael Morgan, "handset accessory market growth will remain somewhat sluggish in 2010, and not until 2011 will the 2008 figure be surpassed. After that, we expect, strong growth will resume."

Within that overall picture, certain segments - notably the very important memory card market - face particular challenges.

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The memory card market, says Morgan, has been so oversupplied that selling prices are barely above production costs.

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Those conditions may be starting to change, however.

"While it's always dangerous trying to call the bottom of a market, very recently it has begun to look as if memory card prices are stabilizing and even starting to rise slightly."

One positive result of the low prices - positive for the consumer - is the increase in capacity of cards that are offered "in the box" with mobile handsets.

Whereas 512MB or 1GB cards were formerly the norm, the low prices mean that buyers are pleasantly surprised to find cards up to 8GB accompanying their phones.

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That's seen as a positive selling point by handset vendors, since the multimedia capabilities of many models today chew through storage and processing power as never before.

Faced with the commoditisation of their products, some memory vendors are starting to experiment with new ways of increasing the cards' value to consumers, such as pre-loading them with music, or having a card include both a video game and supporting software, so when it is added to a phone, it will not only provide the game but improve the device's gaming capabilities.

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