Smartphone Case Business a $436 Million a Year Industry, But Can it Survive on iPhone Design Leaks & Rumors?

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The smartphone case industry — which includes bumpers, casings and screen protectors for devices like the iPhone — is now a $436 million per year industry. But can manufacturers rely on design rumors and leaks for yet-to-be-released smartphone designs?

Business World has a report on how the smartphone casing industry is a “shadowy business,” as it often places its bets on rumors being circulated about new designs. Business is booming, amid the proliferation of smartphones, and the mobile phone case industry is engaged in cutthroat competition. Case makers want to be ahead of everyone else, so each rumor that comes out of suppliers in Asia often lead to costly gambles.

One such company is Hard Candy Cases, which was reported to have spent $50,000 on steel molds and an initial batch of mass-produced cases that fit a slim iPhone design with a teardrop design, tapered back and wider “home” button that was rumored to be an iPhone 5 design in the past few months. Of course, that design did not materialize, as the recently-launched iPhone 4S retained the same shape and form factor of the iPhone 4. The company is left with unusable products.

These rumors often come from manufacturers in China who have their own sources from within Apple’s production lines. Apple is protective of its intellectual property and has been serious with going after individuals that put out leaks. However, case makers say being ahead of everyone else can be an advantage, especially with their 60% markup over production costs. Sometimes, losing out on a few duds is a loss they can absorb. In the case of Hard Candy, they were able to successfully gamble on an iPod Touch casing design in 2010, and were among the first to have cases out after Apple launched the 4th-generation iPod Touch.

Still, Hard Candy Cases thinks their gamble might still pay off in the future, in case Apple does come up with a tapered iPhone design with a wider Home button. It’s a matter of looking for the right rumors and making decisive actions based on intelligent guesses.