iPhone cases have primarily served 2 core functions: 1. Style (including holding cards) and 2. Protection. Recently I have seen some interesting hardware innovation in which the ‘case’ enables entirely new functionality that leverages the smartphone as a full computing platform. Some examples are:
- FlirOne: a personal thermal imaging device
- SatSleeve: turns your iPhone into a satellite phone
- Wello: a case for measuring a lot more vital signs than the well marketed ‘smart pedometers’ on the market
- The structure: for creating 3D models of a room
Some of these, like Wello, are likely substitutes for normal cases. These products may become large businesses when tied to an app and a subscription service (like the SatSleeve). They may also be a large business outside of subscription software revenue if the device is compelling enough that consumers are willing to shell out $200+ on each iPhone upgrade. Assuming a 2 year phone lifetime (which is the common contract length in the US), then a $200 case amortized over the 2 years is roughly equivalent to a monthly Spotify subscription (though lower gross margins). $200 is expensive though, and roughly the cost of a new carrier subsidized phone.
Others, like the SatSleeve and FlirOne, are potentially substitutes for existing expensive stand alone hardware. There are many peace dividends of mobile, and it is interesting to consider the substitution of expensive stand alone hardware for add-ons to the phone (vs. these $$k thermal imaging cameras, $1k sat phones, or $$k Trimble 3D laser scanners). With the growing movement of Bring Your Own Device (BYOD) to work, there could also be an interesting enterprise sales opportunity. Leveraging innovation in mobile computing for cheaper powerful hardware is particularly compelling in emerging markets that have leapfrogged desktop adoption and where mobile will be the primary computing platform.