Extended warranty products provide additional coverage for electronic devices beyond the initial manufacturer warranty period. They cover the cost of repairs or replacement of devices if they fail or stop working due to normal usage over the extended period. With the rising sales of smartphones and other consumer electronic products, the demand for extended warranty is growing significantly.
The global Extended Warranty Market is estimated to be valued at US$ 123.04 Mn in 2023 and is expected to exhibit a CAGR of 8.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Smartphone sales have been rising exponentially over the past few years mainly due to increasing demand for smartphones across developing regions such as Asia Pacific and Middle East & Africa. According to data by Gartner, worldwide smartphone sales to end users totaled 388 million units in the third quarter of 2021, an increase of 1.3% from the third quarter of 2020. The growing sales of smartphones have been a key factor augmenting the extended warranty market growth. With more number of devices eligible for extended warranty coverage, demand from consumers and businesses has increased tremendously. Furthermore, frequent upgrades to newer device models and rising concerns about repair costs have encouraged customers to opt for extended warranty and protection plans, thereby driving market expansion.
Segment Analysis
The global extended warranty market is dominated by automotive segment which holds around 54% share of the total market. Extended warranty offered for automobiles provides coverage against breakdowns and accidents occurring beyond the basic warranty period. With the rising vehicle production globally and increasing complexity in automobile parts and systems, the risk of repairs increases post the original warranty period. This makes extended warranty plans desirable for automobile owners. Other segments in the extended warranty market include consumer electronics, premium smartphones, home appliances, and others. Among these, the consumer electronics segment holds significant share due to shorter lifespan of products and higher probability of technical faults in devices.
Key Takeaways
Global Extended Warranty Market Size is expected to witness high growth over the forecast period of 2023 to 2030 on account of rising sales of premium products and increase in accidental repair cases post original warranty period.
Regional analysis: The North American extended warranty market currently dominates with over 35% share due to large automobile fleet and presence of major consumer electronics manufacturers in the region. Asia Pacific is expected to witness fastest growth due to rising disposable incomes and increasing product ownership in countries like China and India.
Key players operating in the extended warranty market are Xilinx Inc. (AMD Corporation), Intel Corporation, Quicklogic Corporation, GOWIN Semiconductor Corporation, Microchip Technology Incorporated, Lattice Semiconductor Corporation, Efinix Inc. and Achronix Semiconductor Corporation. Xilinx and Intel capture majority share due to strong distribution networks for automotive and consumer electronics segments.
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