Testing times

But the biggest threat to most companies comes from the scores of copycat manufacturers in Shenzhen. Chen said that copycat versions of new cases launched by TTAF could be found in the local market just a week after the original's launch.

But that situation is slowly changing, Utkulu said, as the market is slowly moving toward original accessories. "Such a move will improve industrial standards and raise consumer awareness."

As it is widely expected that Apple may launch the iPhone 5 in October, there is a mad scramble among accessory makers in Shenzhen to find ways of being associated with the phone.

"Not only us, all the companies that produce accessories for Apple are paying close attention to its new products and launch information. We want to take advantage of this to launch our products," said Lu Yifeng, vice-president of BG Microse, a Shenzhen company that makes cases, screen sheets and portable batteries.

Lu said accessory makers have to undertake careful research and intricately understand the product specifications of the new model. This will help the manufacturers bring out the accessories within a month of the phone's launch, he said.

"Competition is really fierce and it is a case of the early bird getting the worm. If our products reach consumers first, we will have the advantages of better sales channels and higher prices."

The company has already made six rough designs for the iPhone 5. Lu said that it will adjust the size of its design and put it into production immediately after the phone is launched.

The company posted revenue of 3 million yuan in 2008 and since then the numbers have been growing steadily by 30 percent every year.

Though he has made a fortune from Apple accessories, Lu is well aware of the potential risk of putting all of his eggs in one basket.

"If Apple stops launching new products, then what would we do?" Lu said.

"We always have this concern and are looking for safer ways to broaden our revenue streams."

To mitigate some of this risk, Lu said his company has shifted its focus to portable batteries.

Currently, 90 percent of the company's sales are from iPhone and iPad cases and 10 percent from portable batteries, but Lu hopes that the percentage of battery sales will increase to 30 percent or 40 percent in the long run.

"There will be no substitute for portable batteries. We can serve Apple, and other brands like Samsung and HTC. In the next three to five years, portable batteries will be the big thing as there is growing demand for mobile devices," Lu said.

Xiao from Hali-power also shares Lu's concerns. "Previously popular Nokia phones have seen a dip in their fortunes and market share. Apple is not doing well at the moment, but who knows what can happen in the next three years. If Apple falls, we will all fall down. We cannot afford that risk," he said.

"Apple does enhance our business, but we cannot be tied to the brand forever."

Last year, Apple accessories accounted for 90 percent of Hali-power's total sales. But Xiao said that figure will dip below 50 percent this year. And it will fall to as low as 30 percent next year, he said.

Xiao attributed this to the fast-growing "universal products" sector.

"Our universal sector has been growing steadily. Nowadays other smartphone brands such as Samsung, HTC and Motorola are catching up really quickly. Unlike Apple, they are all compatible with USB connectors and do not need any special design."

In March, South Korean phone major LG Electronics bought 60,000 units of the Power Star, a 2000mAh portable battery, from Hali-power.

"The accessories market is quite risky and it is not good to fully rely on Apple for future development."

Xiao said that the company used to focus on being an exclusive producer for Apple. That has changed and the main focus now is to gain more business with universal products, he said.

"We want consumers to know us as MiLi, a brand of portable batteries not only for Apple, but also for other brands. That is the direction in which we are moving."

Sun from Shenzhen Mobile Communications Association said that most accessory makers are still reliant on Apple.

"Most SMEs are reaping huge profits due to the immense popularity of Apple products in China and the fact that the US company does not make its own accessories. But that possibility still exists in the future and is an impending threat."

"A quick response to the market and a timely strategy adjustment are crucial for the survival of small and medium accessory makers in Shenzhen," Sun said.

Contact the writers through linjingcd@chinadaily.com.cn, chenhong@chinadaily.com.cn and huangyuli@chinadaily.com.cn