According to a new market research report published by Credence Research “Extended Warranty Market for Consumer Electronics (Product Type – Laptops & PCs, Mobile Devices, Wearables and Others (Peripherals & Accessories); Warranty Coverage Type – Standard Protection Plan and Accidental Protection Plan) – Growth, Future Prospects and Competitive Analysis, 2018 – 2026”, the global extended warranty market for consumer electronics is estimated to hit US$ 50.2 Bn by 2026.
An extended warranty, also referred to as protection plan, prolongs the warranty period on products for additional years. While new consumer electronics are offered with a manufacturer’s warranty, many consumers choose to purchase an extended warranty to cover the repair costs after their initial warranty has expired. Usually, a manufacturer’s warranty has a validity of one year for a consumer product. Consumers have the option to buy an extended warranty at any time, even after the expiry of their original manufacturer’s warranty. It generally provides protection against normal wear & tear and product defects. Many of the plans also cover damages sustained in an accident, such as user spilling something onto the device or dropping it. The extended warranty may be offered by the retailer, manufacturer or the warranty administrator and is charged at a percentage of the product’s retail price.
The most prominent factor driving the extended warranty market is growing focus on the part of consumers to extend the warranty coverage validity. Consumers are often worried about the safety of their electronic products post expiry of manufacturers or sellers warranty. This concern is due to the fact that many of the products have a hefty price tag associated with it at the time of purchase. Moreover, providing extended warranty also helps in rebuilding customer loyalty. Increased market competition and rising prices of raw materials continue to imply pressure on profit margins of manufacturers as well as retailers of consumer electronic products. In such competitive environment, extended warranty solutions are continuously evolving and offering new opportunities to match consumers’ demand.
Furthermore, in order to offer value added services to their customers, some of the leading players in the banking, financial services and insurance industry have been incorporating extended warranty solutions into their product offerings. This is helping manufacturers and retailers to gain confidence of buyers and support their profit margins. Thereby, such agreements and partnerships have been working in the favor of the banking solution providers, extended warranty solution providers and the customers as well.
However, declining sales of PCs is one of the factors impacting the extended warranty market negatively. The unit shipment for PCs have been on the decline globally. This decline in the sale of PCs units is expected to limit the growth of extended warranty market.
Browse the full report at http://www.credenceresearch.com/report/extended-warranty-market-for-consumer-electronics