Looks Like Tough Times Ahead for Case and Accessory Manufacturers

Discussion in 'iPhone Accessories' started by TSquareX, Aug 9, 2019.

  1. TSquareX macrumors member

    Joined:
    Sep 25, 2017
    #1
    Interesting story below about how ZAGG is 'exploring strategic initiatives' a/k/a put itself up for sale as the growth of their business has died and is in decline.

    https://finance.yahoo.com/news/exclusive-smartphone-protective-case-maker-180114263.html

    This transcript of the quarterly call has all the insight into the status of their business and the industry:

    https://finance.yahoo.com/news/zagg-inc-zagg-q2-2019-172331996.html

    Last, I wanted to spend a few minutes discussing our guidance for 2019, and what changed from our last call. As Chris and I have mentioned, we've experienced a number of headwinds, including the reduction in smartphone handset sales, which has continued to soften throughout the first half. Up until the end of June, our forecasting process for fall OEM device launches, assumed a launch consistent with last year, but reduced for the reductions in sell-through that we've experienced thus far during the year.

    As sell-through has continued to soften during the first half, our forecast for the fall launches has also continued to decrease. Starting at the end of June and into July, we began receiving specific customer forecast for the fall OEM launches and found the customer forecast for the initial load-ins and subsequent sell-through is well below our original expectations. Generally, the outlook for smartphone unit sales in the second half of 2019 is expected to be lower than originally projected, as it appears many consumers will delay a smartphone upgrade until 5G phones, networks and content are available in fall 2020. This sentiment has been echoed in recent research reports by industry analysts and earnings releases from both component manufacturers and OEMs. Given these headwinds and specific customer feedback, we have made adjustments to our full year 2019 guidance range.



    Not a pretty picture ahead.

    They are also getting clobbered with the tariff's. I guess China isn't paying the tariffs.
     
  2. ruslan120 macrumors 6502

    ruslan120

    Joined:
    Jul 12, 2009
    #2
    Innovation -> Company invents new product, is widely successful -> Profit
    Democratization (Part 1) -> Other companies follow suit and create similar but mediocre products -> Lower Costs but original company is still successful
    Democratization (Part 2) -> Alternative products improve to the point of being cheap and functional. Profits decline due to competition
    ...
    Innovation
    ... such is the cycle.

    Time for a new category of product to rekindle profits.
     
  3. TSquareX thread starter macrumors member

    Joined:
    Sep 25, 2017
    #3
    ZAGG hasn't had a good new product idea in years.

    mophie was an acquisition, as was Gear4.

    Take those out of the mix and these guys are DOA.
     
  4. jagolden macrumors 6502a

    jagolden

    Joined:
    Feb 11, 2002
    #4
    It’s too bad. IMO, ZAGG makes the best glass screen protectors available. Won’t use anything else. Would hate to see them go down.
     
  5. TheIntruder macrumors 6502a

    TheIntruder

    Joined:
    Jul 2, 2008
    #5
    The market has matured, shipments have slowed, and it's is saturated with product.

    Plus, not unexpectedly, most users may think twice about a 1-pack screen protector that still costs 2-3x of a multi-pack Amazon seller no-name brand, no matter how pretty the package is, or how good the support is.

    They've long become commodities, and the days of $40 protectors has passed, unless you've fought for coveted shelf space inside Apple stores, and have access to the less price sensitive shippers there.
     
  6. Zenga13 macrumors member

    Zenga13

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    Location:
    Netherlands
    #6
    I have owned a few Zagg keyboards for my ipads and I loved them, but they were very poor quality as in the hinges breaking or the plastic covers breaking. Since then, I don’t buy Zagg anymore. And also, when a new product arrives, it takes months untill Zagg starts selling them in Europe, by that time I’ve already bought another brand.
     
  7. willmtaylor macrumors G4

    willmtaylor

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    #7
    I haven’t overpaid for their overpriced products in years. Sorrynotsorry.
     
  8. OneMike macrumors 603

    OneMike

    Joined:
    Oct 19, 2005
    #8
    Products are overpriced. At a quick glance I can get one ZAGG shield for $25 on amazon or a 3 pack for $5 as I did.

    The $5 screen protectors work just fine.
     
  9. alpi123 macrumors 6502a

    alpi123

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    #9
    Wasn't Zagg the one selling plastic screen protectors advertised as sapphire glass for $50?
     
  10. mbar9607 macrumors member

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    Apr 8, 2016
    #10
    I used to be a huge ZAGG fan and over time have tried several others. With the glass on smart phones getting stronger and stronger over the years and more scratch resistant there not a large need for the screen protectors anymore.
     
  11. Joe h macrumors regular

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    Sep 22, 2017
    #12
    Zagg is way overpriced, and their screen protectors are brittle. Otter box defender series and the Best Buy brand insignia screen protectors are the best way to go.
     
  12. Ta0jin macrumors 6502a

    Ta0jin

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    Location:
    Maryland
    #13
    Half the reason I think they're still in business is because of Best Buy selling the the screen protectors when selling a phone. I have a friend who still thinks there is a huge difference in the quality of a ZAGG glass and ones can you get off amazon for way cheaper. It’s the same thing more or less.
     
  13. superleakTx macrumors regular

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    Dec 28, 2018
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    Texas
    #14
    Can't agree with you anymore. I am an ambassador of case makers in Texas, they told me the cost of Zagg is about 6 dollars: 5 in the glass screen protector and 1 in the package and shipping.
     
  14. TheIntruder macrumors 6502a

    TheIntruder

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    Jul 2, 2008
    #15
    If it actually costs Zagg $6 per unit, then it's little surprise that the company sees trouble ahead and has put itself up for sale.

    Search for "iPhone screen protector" on Amazon, and a 3-pack for older phones is ~$6 retail, and tagged as a Best Seller. For newer phones, it's higher, but can reach down to around the same ballpark. They're cheap enough so that if the user has an issue, contacts the seller, there is nothing to diagnose or troubleshoot, the seller will have AMZ ship a replacement, no problem, even at that level of pricing.

    Like I said above, these things have become commodities.

    It's clear that phone replacement cycles have lengthened, consumers have become more price sensitive, and Apple may have flown a bit too close to the Sun with iPhone pricing, but at least the new models have new features that attempt to compel.

    What does the $20-40 screen protector from years past have that's compelling over a $4 protector of today?
     
  15. Ta0jin macrumors 6502a

    Ta0jin

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    #16
    Nothing, it’s exactly the same as the ones on amazon lol.
     
  16. JagdTiger macrumors 6502

    JagdTiger

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    #17
    There is less funds to go around and how many case or keyboards can people purchase if they have no new devices to use it with.
     
  17. citycentral821 macrumors newbie

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    #18
    Those big brands will have problems, they are just too overpriced!
     
  18. Ta0jin macrumors 6502a

    Ta0jin

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    Nov 9, 2011
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    Maryland
    #19
    Exactly! When the quality of the big brands are the same as what you can get on amazon for a third of the price, who will keep paying that? It’s the people who actually think brand name means better, even when it’s likely made in the same factory! Eventually they don’t want to pay $40 for a piece of glass...
     
  19. JagdTiger, Aug 22, 2019 at 8:19 AM
    Last edited: Aug 22, 2019 at 8:57 AM

    JagdTiger macrumors 6502

    JagdTiger

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    #20
    If the ceo of corporations would cut their pay in half perhaps then the company(s) would do good.
     
  20. superleakTx macrumors regular

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    #21
    Just because they rent so many booths in the malls. And they need to hire people to work.,
    Plus they just are greedy to make more money,.
     
  21. JagdTiger macrumors 6502

    JagdTiger

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    #22
    it’s funny how companies go out of business yet there is plenty of cash for the board members.
     
  22. willmtaylor macrumors G4

    willmtaylor

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    #23
    Then they lose decent CEOs because the salary/benefits are comparable to competitors.
     
  23. JPack macrumors 601

    JPack

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    Mar 27, 2017
    #24
    What year is this?

    Who still orders from Zagg when you can order a glass protector from AliExpress for $1 with free shipping?
     
  24. willmtaylor macrumors G4

    willmtaylor

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    Here(-ish)
    #25
    I do LOVE waiting a month for an item to ship that may or may not be broken!
     

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