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LAPTOP ACCESSORIES: Key to Greater Margins In a crowded and over-competitive market, laptop accessories were in the bestseller list. Channels enjoyed margins upwards of 15% in a business whose size was Rs 80-100 crore
Among various niche product segments, the laptop accessories business was something that really stood out in 2002-03.
While there’re players who have dealt in this product line for many years now, last year saw increased activity. A whole new range of products entered the market, while a number of vendors established their presence and appointed distributors. The notebook market also had good growth, giving an impetus to accessories’ sale. This was a boon at a time when shrinking margins, warranty headaches and sales pressures became integral to the channel business. In this grim backdrop, where resellers jostled to make Rs 50 on a Rs 5,000 sale, what alternative did they have?
Laptop accessories, really! This was a niche product segment, where there aren’t too many players; margins are attractive; demand is decent; and the market is full of potential.
| PRODUCT SNAPSHOTS |
| CABLES: USB 2.0 cables, networking cables, KVM cables |
| CARDS: USB 2.0 PCI card, USB 2.0/FireWire combo card, Bluetooth PDA adapter card |
| ADAPTERS: USB to serial, USB to PS2, USB to parallel, Bluetooth to USB, PS2 to USB keyboard and mouse, USB to infrared, USB PDA/serial, USB to USB and USB to Ethernet adapter |
| STORAGE: USB hard drives and USB/FireWire combo drives |
| MEDIA-READERS: memory card reader, CompactFlash reader, SmartMedia reader and 4-in-1 and 6-in-1 media readers |
| OTHERS: KVM switches, modems, mouse, PDA keyboards, wireless notebook network cards, wireless PDA network card, hubs, video camera, USB light, presentation and gaming device |
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Of various shapes and sizes
Laptop accessories make up a huge segment with a vast range of products. These include a myriad of USB, FireWire, storage, peripherals, networking devices and, of course, batteries. However, the functionalities of these accessories are just not limited to laptops. Many accessories facilitate the convergence between telecom and IT products. Among fast-moving products in this domain are portable hard drives, USB modems, PDA keyboards and interconnecting adapters—USB to PS2, USB to parallel, bluetooth to
USB.
Partners dealing in this business report good unit sales of batteries and power adapters. With wireless networking catching up, devices to address wireless needs of a mobile user are also expected to catch the attention of channel players. While there are some authorized distributors of leading vendors in the country, a majority of partners import the products from Taiwan, China and Singapore. Among the well-known brands that sell in the country are Targus, Belkin, Iogear and Atek. Realizing the market potential, large distributors like Tech Pacific and Compuage have also included these products in their lineup.
Burgeoning business
While there’re no official figures on market size, estimates of the laptop accessories (including PDA accessories and batteries) business place overall size at Rs 80-100 crore. Currently, the number of partners exclusively dealing in this product segment is not more than 30-35. As for growth, partners reported between 30% and 50% revenue growth in fiscal 2002-03 over 2001-02. There’re also a few who have seen their accessories business grow by a cool 100%.
Tempting margins
Laptop accessories are one of those rare segments which offer margins upward of 15%, even as high as 50-60%. “We have set 30% as the lowest working margin for our business, and ensure that the identity of these products does not get mixed up with heavily-traded products like monitors and hard disks,” a top player said. That’s because only margins of over 15% can justify the volume sales—which are very small compared to any other IT product.
DQ Channels India
MULTI-FUNCTION DEVICES: Multiplying | 
