"Growing Penetration of High-end Smartphones, Tablets and Laptops Aiding the Market Growth"
Extended warranty market expected to grow at a CAGR of 6.2% from 2021 to 2029 and reach US$ 59.53 Bn in 2029. Growing penetration of high-end smartphones, tablets and laptops among consumers is one of the primary factors governing the growth for extended warranty market for consumer electronics. The high price of these products has compelled consumers to think of extending the usual one year warranty provided by manufacturer. Moreover, by offering value added service like extended warranty, shoppers and retailers can seize opportunity to engage consumers with current advanced technology products and influence buyer’s decision. Extended warranty solutions offer additional warranty period for buyers to protect their costly high-end products. Offering such value added service for high-end devices helps retailers to gain consumer confidence and develop long-term association. In addition, strategic partnerships between retailers and warranty providers is another important factor contributing to the market growth. This strategy has proved to be a win-win solution for banking solution providers, extended warranty solution providers and the customers. In 2019, N26 Group, a banking service provider in Europe formed strategic partnership with Allianz Global Assistance Europe to offer its comprehensive insurance package for premium customer including extended warranty for consumer electronics. Similarly, In March 2014, LetsTango.com, one of the leading online retailer announced its strategic partnership with Allianz Global Assistance to offer extended warranty service for electronics products purchased on their website.
"Mobile Phones and Tablets to Contribute Significantly to the Extended Warranty Market Growth in Coming Years"
In 2020, the global extended warranty market for consumer electronics was led by the mobile devices segment. The segment comprising smartphones and tablets, accounted for over 50% of the overall value generated in the market. The mobile devices segment growth is primarily governed by the rising penetration of high-end expensive smartphones, especially in countries such as the U.S, U.K., Germany, France China, India, etc. In addition, consistently growing penetration of tablets is another prominent factor supporting the mobile devices segment growth. Due to continually growing penetration of smartphones and tablets, the segment is set to retain its dominant position in the market over the forecast period. Moreover, in Europe, people preferring high-end expensive smartphones constitute over 40% of the overall smartphones consumer base. These users are the prime buyers of related extended warranty contracts, thereby fueling the segment growth.
In 2019, the laptops & PCs segment accounted for the second largest share, in terms of market value, in the overall extended warranty (for consumer electronics) market. Extended warranty for laptops and PCs typically offer coverage in case of drops, spills, display burnout, hard drive crash, connectivity failure, RAM failure, defect in charging ports and few others. However, the declining sales of PCs globally has influenced the market growth negatively.
"High Consumer Awareness Pertaining to Benefits of Extended Warranty to Drive Market Growth in North America"
North America dominated the global extended warranty market for consumer electronics in 2020 and accounted for more than 55% of the overall market value generated worldwide. The dominance of the region is mostly due to high consumer awareness regarding the benefits of extended warranty. Moreover, the U.S. has a large consumer base of high-end smartphones, laptops and PCs, a factor influencing the extended warranty market for consumer electronics growth positively. Overall consumer electronics market in the U.S. has been witnessing a consistent growth since the last few years. Consumers’ willingness to pay high prices for technologically enhanced products has been driving the consumer electronics market in this region, thereby complimenting the extended warranty market for consumer electronics growth.
Europe is another important market for extended warranty for consumer electronics. U.K. accounts for the largest market size in the region owing to high consumer awareness for extended warranty coupled with high penetration of smartphones and PCs. In addition, growing popularity of smart gadgets and wearable and high cost of consumer electronics have forced the consumers in Europe to procure an extended warranty for their expensive devices. Furthermore, lucrative plans and the promotional proposal offered by the warranty providers have also promoted sales of extended warranty on consumer electronics. Thereby, the trend is expected to continue in proportion with rising prices of consumer electronics and encouragement from the companies to make consumer go for extended warranties.
"Strategic Partnerships with E-commerce Retailers to Remain a Vital Strategy for Extended Warranty Service Providers in Coming Years"
Some of the leading providers of extended warranty have been engaged in building strategic partnerships with various e-commerce retailers under which they cover the electronics sold over such online portals. Consumers would either have to pay an additional cost or the online retailer bares a portion of the premium cost in order to offer added value to their customers. Extended warranty generally covers normal wear & tear and product defects. However, certain plans also cover accidental damages such as drop damage or user spilling something onto the device. Either of the manufacturer, retailer or warranty administrator provides an extended warranty and the charge is fixed at a percentage of the product's retail price.
Some of the major players profiled in the report are Allianz Global Assistance, American International Group, Inc., Amtrust Financial Services, Inc., Asurion LLC, Chubb Limited, Assurant, Inc., SquareTrade, Inc., The Warranty Group, Inc., Advanced American Auto Warranty Services LLC and Corporate Warranties India Pvt. Ltd among others.
Historical & Forecast Period
This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Extended Warranty market are as follows:
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.
| ATTRIBUTE | DETAILS |
|---|---|
| Research Period | 2022-2032 |
| Base Year | 2023 |
| Forecast Period | 2024-2032 |
| Historical Year | 2022 |
| Unit | USD Million |
| Segmentation | |
Product
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Warranty Coverage
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Region Segment (2022-2032; US$ Million)
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Key questions answered in this report
