Luggage maker Samsonite is entering the smartphone accessories space. The company announced Thursday that it was purchasing Speck, a case maker most famous for its CandyShell line of colored smartphone cases, for $85 million.
Speck makes cases for a wide variety of devices, including cases for almost every current Apple mobile device as well as phones from Samsung, Asus, and HTC. Speck cases are frequently sold at airports to travelers alongside Samsonite luggage, so the pairing of the two products appears to be a natural fit. While Samsonite has produced laptop bags for decades, it currently does not sell a smartphone case.
According to estimates from NPD, Speck is one of the four largest companies in the $20 billion smartphone accessories market, alongside Otter, Belkin and Incipio, although that estimate does not include accessories from OEMs themselves, such as Apple’s iPhone 5C case. Earlier this year, accessories giant Logitech entered the market with a $200 package of cases and related accessories.
As the smartphone market matures and saturates, cases are a logical place to look for increased revenues. Smartphones are slimmer, sleeker, and more fragile, which means many consumers opt for protection before they leave the store. Some estimate that the average smartphone customer will spend nearly $60 on aftermarket accessories.
Speck not only has name recognition, it has a few unique products, including a case that acoustically amplifies a smartphone’s speaker. However, Samsonite should be aware of the growing threat from cheap Chinese vendors. Because the most common reason for a consumer buying an aftermarket case is device protection, often these cases are more than sufficient, and can be purchased from Amazon for as little as a dollar. Alternately, Speck products are regularly counterfeited. Speck’s CEO obliquely referenced these issues and others in the announcement:
Although Speck experienced a temporary setback in 2013 from its historically strong results when the business was impacted by an industry-wide overhang in inventory from 2012, efforts to restructure the business are already well underway.