The iPod ecosystem

The forest of products includes a baby stroller with a slot for an iPod and a belt with an iPod holder as the buckle.

In the weeks leading up to last month's Macworld conference, few people knew what the notoriously secretive Steven P. Jobs was going to announce.

Gavin Downey, the director of product management at the Belkin Corporation, listened to all the rumors leading up to the everything-Apple conference in San Francisco, from the outlandish to the logical. He had to. His job is making sure there are cases, rechargers and other accessories that add features to all the variations of iPods that Apple Computer makes. Any change in direction by Apple means his company has to scramble.

Last September, for instance, on the eve of an Apple announcement, Belkin's lead designer was dispatched to China. There he waited for word of the rumored replacement to the iPod Mini, which turned out to be the slim Nano.

Despite the radical redesign, different from any previous iPod, the Belkin designer was able to mock up prototype cases within two weeks. Models were in the stores well before Christmas. "There is no room in this industry for lack of execution," Downey said.

Not when making add-ons for the iPod is a $1 billion business. Does that sound like hyperbole? Consider this. Last year, Apple sold 32 million iPods, or one every second. But for every $3 spent on an iPod, at least $1 is spent on an accessory, estimates Steve Baker, an analyst for the NPD Group, a research firm. That works out to three or four additional purchases per iPod.

That obviously makes accessory makers happy. It thrills retailers, whose profit margin on the accessories is much higher than on an iPod. And it delights Apple because the racks of add-ons made just for the iPod--2,000 different items at last count--send a strong statement to consumers that the Apple player is far cooler than a Creative or Toshiba player, for which there are few accessories.

iPod add-ons

Sales of all those cases, car rechargers and docking stations totaled $850 million last year, Baker said, and that is not even counting Internet sales. Sales will easily soar well beyond $1 billion this year.

"Most of us were caught a little bit by surprise by the growth trajectory," admitted Rob Humphrey, director of marketing for Kensington, a maker of computer peripherals and now one of the biggest makers of iPod accessories. The accessories now account for about 20 percent of Kensington's total sales.

An entire ecosystem has emerged around the music player, introduced by Apple in October 2001. Other manufacturers had produced MP3 players earlier. But the simple design of the iPod, plus Apple's iTunes store, quickly helped Apple to dominate the market. And that simple design--some might even call it bland--encouraged people to personalize the machine.

There are now more than twice as many iPod accessories as there were just last summer, according to Apple. And that number does not include the docking stations that will be available in 40 percent of cars sold in the United States this year.

About 28 percent of all accessories are cases. You can find microfiber sleeves or neoprene iPod cases made by dozens of start-ups for $10 or $20 or a $200 python-skin case made by Coach, the maker of stylish leather handbags. About 30 percent of sales are for car chargers or transmitters and the remainder are speakers and docking stations.

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But the forest of products includes a baby stroller from Kolcraft with a slot for an iPod, and a belt called the TuneBuckle with an iPod holder as the buckle. For sheer extravagance, Hammacher Schlemmer lives up to its reputation for selling the ridiculously expensive in its catalogs with the $4,000 Triode-Tube iPod speakers with old-fashioned vacuum tubes that glow through see-through panels. The Sharper Image catalog has a $700 iJoy massage chair with an iPod holder in the armrest.

The iBoom is a white boom box that Digital Lifestyle Outfitters is selling for $150. At the Consumer Electronics Show in

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