Consumer electronics lifecycle and protection market intelligence.
Opening lines...
Over the years I’ve undertaken a fair share of specialist insurance & warranty research, particularly in the automotive and consumer electronics sectors. Whether on the boards of dynamic start-ups alongside LSVP and Sequoia (as was), or around the board tables of less dynamic corporates, the questions, usually in preparation of investment theses, are often the same: how big is this or that market? Is it growing? What’s the quickest way in? What’s this or that competitor up to? Who are the better inorganic targets? And, so on.
Often those questions have involved acquiring secondary research reports. Some of those reports were valuable and served a purpose. More recently though, I find myself calling bullshit every time time one of these syndicated reports gets published with ridiculous CAGRs way in excess of the rate of new underlying product sales. This Substack is in someways a response to that.
There are a few reasons for my “startup revenue growth graph” scepticism. It’s possible that extended primary ownership periods could induce higher policy attachment rates, but there is not enough available evidence to establish cause. It is also possible that top end product prices continuing to climb may push us towards purchasing an insurance blanket, but again there’s scarce direct evidence published. And, whilst EU policy on the right to repair is taking shape, it’s unclear how this noble and justified movement may impact insurance buying globally1.
Besides, if CAGRs are that good, new players would be throwing lots of shiny new capital to work protecting our stuff. But, outside of the usual competitors (or those about to get burnt) this doesn’t seem to be the case. Peak smartphone for example may have been reached eons ago in 20162. GfK have recently told us that 25% of UK consumers are now opting for a refurbished or secondhand device3, on which I’m currently assuming insurance attachment rates are lower than they are for new devices4, plausible if a degradation in personal finances is the primary purchase motivator.
All that said, there’s still enough of a global market (several billions) with tenacious competition to justify a look under the covers and fortunately, I still like digging around. So, even if the outcome is dull as fuck to most people, I’ve most likely enjoyed the process and I’ll have learned something new. I hope you will too.
The current plan is to publish various research material monthly for each of the key global markets (and others by request). I’ll cover market sizes and structure, main distribution channels and key distributors (with value estimates), market competition and pricing, with some level of detail so that you get a decent view of market dynamics and drivers. I’ll also publish any key updates, emerging trends and will begin to dip into the value chain beyond insurance: trade in, upgrade, refurb, repair and recycling. All data will come from publicly available and referenced sources. Assumptions and calculations will be made clear.
So, if you’ve previously paid for a Finaccord or a Mintel report and would like a regular additional and sometimes sweary alternative source, please consider subscribing. Quality research takes time and effort and I hope it’s valuable to enough people so I can feed the family and keep myself in running shoes and Orangina™.
Peace.
sb.
Subjects for research at a later date.
Source: https://www.weforum.org/agenda/2018/04/have-we-reached-peak-smartphone/
Source: https://www.gfk.com/press/one-quarter-of-all-mobile-phones-sold-in-the-uk-in-2023-were-bought-secondhand-or-refurbished
More future research.