Apple’s decision to switch to a smaller dock connector for the iPhone 5 may frustrate consumers whose old cables and accessories are essentially rendered obsolete, but it should give Apple and other iPhone accessories manufacturers a nice little revenue boost.
Apple will generate about $40 million in revenue in the next fiscal quarter from customers worldwide paying for cables that work with the iPhone 5′s new dock connector and at least $100 million in revenue from the new cables over the course of the next year, according to an estimate provided to Mashable by Michael Morgan, a senior analyst with ABI Research covering mobile devices.
Morgan predicts that Apple will ship 47 million iPhone 5s globally in the fourth quarter of this year — a conservative estimate by some standards — but he expects that only 5-10% of those customers who get the latest iPhone will end up purchasing a new cable for it. The rest will just use the free cable that comes in the box. Based on this, he predicts that some 2 million cables will be sold at $20, generating around $40 million in revenue in the next quarter.
This is only one part of the accessories sales that will be driven by changes to the latest iPhone. Apple and other companies also stand to benefit from sales of new docking stations designed to fit the iPhone’s smaller connector. Morgan estimates that there will be 5 million to 10 million iPhone docking stations sold in the next year, with prices averaging $150-$175 a pop, potentially generating more than $1 billion in revenue for the accessories industry.
In particular, Morgan expects that the hospitality industry will drive sales of new iPhone 5 docking stations. “A lot of hotels buy iPhone docking radios, a fairly expensive unit that can be hundreds of dollars depending on the quality,” he said. “That’s not going to work now.”
What’s more, anyone with a car charger will need to purchase a $30 adapter in order to connect it with the iPhone 5.
For Apple, all of this extra income amounts to little more than a drop in the bucket considering that the company generates more than $100 billion in revenue on an annual basis. But for Apple’s customers, it can quickly add up to a significant expense.
Cables, adapters and docking stations aren’t the only accessories whose sales will be driven by the latest iPhone. Case makers also stand to make a pretty penny from the iPhone 5, which is longer and thinner than the iPhone 4 and iPhone 4S, and so won’t work with previous generation cases.
According to ABI, 75% of those who purchase an iPhone buy a protective case, and the average selling price for a case is $18. If we assume that Apple will sell 58 million iPhone 5s by the end of this year, as analysts surveyed by Bloomberg predict, then sales of iPhone 5 cases will bring in $783 million in revenue for 2012.
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