Personal computers have become the cars of the 1990s. Like autos in their early days, PCs used to be boring, one color, box-shaped, appreciated mostly for their practical use.
Now the PC is rapidly on its way to becoming a mass-market appliance, with users looking to "personalize" their box with the computer equivalent of whitewall tires and leather steering-wheel covers. Buyers are looking to jazz up their machines with everything from bright designer colors to a mouse with a customized trackball.
"The PC has been consumerized," says Mark Dwight, director of product development at Kensington Microware, a leading maker of computer accessories. "The Internet will drive a lot of that."
The proliferation of PCs into homes, offices, and small businesses is propelling the growth of what some analysts have dubbed the computer "aftermarket." The term encompasses the sale of a wide variety of peripheral items including joysticks, wrist pads, surge protectors, keyboard drawers, notebook carrying cases, and storage cases for CD-ROM or floppy disks.
At trade shows like the annual giant Comdex gathering in Las Vegas this week, the attention tends to go to fancy hardware. But the computer "aftermarket" reached about $700 million in sales in 1994, according to research by Venture Development Corp. It will reach $1.2 billion in 1999 in the United States and exceed $2 billion globally, the firm predicts.
"Now that people are spending hours in front of the computer, it matters that your monitor be at the right height or that your mouse is a compatible one for you," says Peter Dupont, president of Kensington, the No. 1 US provider of branded aftermarket products.
Mr. Dupont cites marketing studies to divide consumers into two groups. There are the "functional users," people who are looking for accessories that simply get the job done best. The growing market is among the "personalizers" who want to dress up their workplace, whether at home or office, to reflect their personality.
"Consumers have these products in their homes, and because the products are becoming more designed, people are asking, 'Why do I have to have this crummy-looking disk box next to my computer," says Stephen Baker, who analyzes this market for International Data Corp., a computer-research company.
Aftermarket products have typically been low-price items sold at large retail outlets like computer superstores or office-products stores such as Office Depot and Staples. The items are attractive to retailers because of the high average gross-profit margins they get, ranging from 20 to 70 percent.
The growth of the market is attracting new attention from a number of big players. Kensington, which made its mark as a producer of high-quality accessories originally for the Apple Macintosh market, was acquired by ACCO World Corp., one of the largest office-supply companies in the world. ACCO itself is part of American Brands, a $10 billion global consumer-products company.
There are serious competitors for this overall market, among them Rubbermaid Inc., of Wooster, Ohio, Fellowes (an Illinois-based office-products maker), and Pendeflex, a Swedish-owned firm. And tens of companies are competing in specific market segments such as surge protectors. Perhaps the hottest market is for the computer mouse, with Kensington fighting it out with firms such as Logitech and Microsoft.
The change in work style is creating new markets, says Kensington's Dwight. He points to surging sales of portable security systems for laptop computers to prevent them from being stolen out of hotel rooms. Kensington's specially designed lock is now its No. 1 product, selling 50,000 a month.
With the backing of its corporate parents, Kensington has carried out a series of acquisitions of computer-accessory companies, among them Silicon Sports, a maker of wrist pads and other products, and Gravis, a maker of joysticks and game pads. Kensington has recently embarked on a strategy of consolidating all ACCO brands under the Kensington name, taking advantage of the company's reputation for quality. The resulting line will cover about 500 products with $110 million in annual sales.
"The brand strategy makes sense," says Mr. Baker, "because retailers are going to want to consolidate their buying."