IPhone accessory market set for slow start

SAN FRANCISCO (Reuters) - Owners of Apple Inc.'s iPod love to trick out the music players with cases, speakers and other accessories and its upcoming wireless iPhone promises to be no different.

But the iPhone accessory market looks like it will get off to a slow start when the device goes on sale this Friday due to the tight grip Apple kept to prevent information leaking to the market about its most anticipated product in years.

"Apart from measurement purposes, developers haven't been given access to the iPhone. Nobody's really been able to test it electronically with anything," said Jeremy Horwitz, editor- in-chief of iLounge, a top Apple news Web site. "The reality is that they want to have a tighter grip on accessories this go around."

While many accessories will be $10 or $20 afterthoughts to a purchase that will run $500 or $600, all those screen protectors and car chargers eventually add up to big money.

Every year, consumers spend at least $1 billion on iPod accessories and about 30 times that on phone accessories. The iPhone is poised to tap both markets.

"We're anticipating that the iPhone will do well and that the market for accessories will be in the hundreds of millions of dollars," said Shane Igo, a product manager for Belkin, one of the biggest accessory makers.

But with little information to go on, accessory makers such as Belkin and Griffin Technology, both privately held, are initially rolling out only the basics: protective cases and charging cables.

Gadgets such as FM transmitters that need to work closely with the iPhone's innards will have to wait until developers can get their hands on fully operational handsets.

Apple also makes its own accessories, from chargers to an FM radio add-on, and it collects licensing fees on items sold by outside manufacturers.

But many current iPod accessories will not work properly on the iPhone. That is due to factors such as wireless interference and a new headphone port meant to encourage use of new ear buds that include a microphone for telephone calls.

Wall Street Journal technology reviewer Walter Mossberg cited the incompatibilities as one downside of a device that he otherwise deemed "beautiful".

Said iLounge's Horwitz: "There is no clarity whatsoever we have as to what will work 100 percent, what will work 50 percent and what will not work at all."

Some analysts see an overlap between the market for supporting gadgetry to the iPod and iPhone.

"Some consumers are going to buy the iPhone instead of an iPod and in that sense it's probably cannibalistic," said Van Baker at market research firm Gartner.

But the phone's many features open up the prospect for new sales in areas such as portable keyboards, wireless headsets and even adapters for that newfangled headphone port.

Belkin, for instance, is selling a plastic case with a clip on the back that folds out and serves to prop the iPhone at an angle for hands-free video watching.

"There's a lot left to be defined. With the iPhone, all of a sudden there's the Web aspect, camera, e-mail and a whole lot more. It really opens the door to what's available," said Alex Birch, iPhone category manager for Griffin Technology.