s * o o * o o o Apple's iPhone case giveaway could cut into other case suppliers' sales

With Apple handing out cases to address the phone's antenna issue, analysts say, there will be less demand for cases offered by third-party suppliers.

By giving out free cases for its iPhone 4, Apple Inc. hoped to smooth over troubles with unhappy customers.

But it may annoy a different group: the companies that make the various hard, soft, colorful, arty, sleek, fat and other kinds of enclosures bought by users to personalize their phones.

With Apple giving away its own cases, analysts say, there will be less demand for those offered by third-party suppliers.
At least two case manufacturers contacted by The Times acknowledged that Apple's giveaway could cut into sales. They declined to comment publicly, saying they did not want to sour their relationships with Apple.

That's not surprising, because manufacturers of cases and other Apple accessories count on getting shelf space in Apple's retail stores.

But these companies could end up being among the victims of Antennagate, or the iPhone's loss of signal that Apple is trying to fix with its giveaway.

"There is a whole ecosystem of guys who make add-ons for iPhones and Apple products," said Mark McKechnie, an analyst at Gleacher & Co. "Some of these companies live off of Apple, essentially. If Apple kicks in the refund money and gives away its own cases, it could cut into the sales of a lot of different companies. There's not really a precedent for this, so we'll have to see how it plays out."

Following through on a pledge this month, Apple on Friday began offering a downloadable application that lets iPhone 4 owners choose from among several cases. Customers have until Sept. 30 to ask for a free case.

Apple is also giving refunds to customers who already bought the company's Bumper case.

A phone cover prevents the electrically conductive skin of a finger from interfering with the signal.

The case giveaway may cost Apple, which has sold nearly 4 million iPhone 4s since the handset's debut last month, as much as $175 million, according to Peter Oppenheimer, the company's chief financial officer.

Accessory makers could prevent Apple from biting too deeply into their sales if their products are different enough from what Apple is giving away, said Jack Plunkett of Plunkett Research.