A Universe of iPod Accessories

Or, as the New York Times describes it, an "iPod Ecosystem."

It appears that the iconic MP3 player has become the fulcrum of its own economy. Making accessories for the iPod is a $1 billion-a-year business.

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.

Sales of all those cases, car rechargers and docking stations totaled $850 million last year, Mr. 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.

One thread of the story is how much anxiety is caused trying to anticipate the Next Big Thing from Apple's iPod division. An executive from Belkin, who makes cases for the 'Pod, spent several days at his third-world manufacturing plant because he heard a rumor that Apple was going to introduce a replacement for the iPod Mini. When they announced the nano, he was able to work on-site to develop new cases for it and get them on store shelves within two weeks.

I don't know if cases will be affected, but I have a prediction for accessory-makers trying to anticipate the iPod's next big thing: the satellite-radio iPod. If Apple isn't working on it, then they're not as smart as I think they are. Take the 60 gig 'pod, replace the hard-drive with flash memory to make room for a Sirius or XM receiver, and you have the best consumer electronics product of 2006.

Or, launch your own darned satellite. Why not redefine that industry, too? Call it AppleStar Radio, or something.

I'd buy an AppleStar iPod in a heartbeat, and I only just got my nano at Christmas.