iPod add-ons: 1,000 accessories in your pocket

Still more companies, large and small, are plugging themselves into the booming market for iPod-related gear. Photos: iPod add-ons abound Video: Macworld is iPodworld in 2006

SAN FRANCISCO--The market for iPod add-ons, already booming, is starting to show signs of maturity.

That's clear from the number of accessory makers here at Macworld. But it's also apparent at the nearest Best Buy or Circuit City store, where a significant amount of shelf space is devoted to all things iPod. And it's not just tech-oriented retail. Gear for the iPod can be found at the convenience store and in some of the world's priciest boutiques.

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Video: Macworld is iPodworld in 2006
At Apple show, accessories abound

It's a far cry from a few years back, when a handful of upstarts had a corner on the market.

"The bar has been raised," said Brian Baucom, director of marketing for Digital Lifestyle Outfitters, a company that makes nothing but iPod gear. At one time, a smattering of companies, such as DLO, Griffin Technology and Belkin had the market largely to themselves. Now, Baucom said, there are more than 200 rivals.

But along with the increased competition has come a continuing surge in the market. Researcher NPD says the market for iPod accessories topped $850 million last year, not counting gear sold over the Internet.

And sales of the player itself have continued to skyrocket, meaning there's no reason the accessory business can't double this year, according to NPD analyst Stephen Baker.

The result is that the tiny companies that became overnight successes with cases and car stereo adapters are now big operations.

Gary Bart got into the accessories market in 2002 when he stitched together his first prototype case. Now his company, XtremeMac, has 60 employees and a huge 1,600-square-foot booth with a snazzy new logo and tagline: "The iPod Xperts." The company plans to double the size of its booth next year, and the only vendor with a booth that size this year is Apple itself.

Many of the bigger name PC accessory makers have also launched iPod gear. Belkin was an early leader, but others such as Kensington, Targus International and Logitech have also added a range of iPod gear. And Baker says the broader players have an advantage.

"They can leverage a whole relationship with the retailer across a range of accessory categories that guys like DLO, Griffin and XtremeMac can't," Baker said. "Those guys have to be more nimble and unique to be able to compete."

More and more, Baker said, the iPod accessory market will become a standard retail business. But retailers from Target to Urban Outfitters love the products, with their 20 percent to 50 percent profit margins. The products are particularly appealing to electronics stores, which make relatively little off the sale of the player itself, Baker said.

To stay ahead of the curve, all the makers are in a constant battle to one-up both their competitors' products and their own offerings. For instance, speaker maker JBL's latest creation is the "JBL On Time," a $299 device that combines an alarm clock, iPod dock and speaker system.

The first iPod alarm clock, the $99 iHome, has been a hit, filling a niche that the speaker makers had somehow missed. JBL is hoping its product, with dual alarm and higher-end speakers will also find a place on the digital nightstand.

Apple itself has been getting in on the act in two ways. The iPod's creator has slowly started to add more accessories of its own, from the in 2004, to the armbands and silicon "tubes" Apple launched with the Nano last year, to the $49 FM radio/remote that Steve Jobs showed off Tuesday.

But Apple is also looking to gain some control over--and profit from--other companies' products. Last year, the company introduced its "Made for iPod" program, which certifies products as compatible with

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