Rise in awareness for extended warranty and surge in penetration of laptops, tablets, and smartphones have boosted the growth of the global extended warranty market
PORTLAND, Ore., Aug. 3, 2020 /PRNewswire/ -- Allied Market Research recently published a report, "Extended Warranty Market by Coverage (Standard Protection Plan and Accidental Protection Plan), Application (Automobiles, Consumer Electronics, Home Appliances, Mobile Devices & PCs, and Others), Distribution Channel (Manufacturers, Retailers, and Others), and End User (Business and Individuals): Global Opportunity Analysis and Industry Forecast, 2020–2027". According to the report, the global extended warranty industry generated $120.79 billion in 2019, and is projected to reach $169.82 billion by 2027, growing at a CAGR of 7.4% from 2020 to 2027.
Drivers, restraints, and opportunities
Rise in awareness for extended warranty and surge in penetration of laptops, tablets, and smartphones have boosted the growth of the global extended warranty market. However, declining sales of PCs hamper the market growth. On the contrary, expansion of products and services and untapped potential of emerging economics are expected to create lucrative opportunities for the market players in the coming years.
The Covid-19 outbreak has severely affected the finance industry with lower incomes, production shutdowns, and staff shortage.
The inadequate digital maturity and pressure on existing infrastructure have affected the market.
The standard protection plan segment dominated the market
By coverage, the standard protection plan segment held the largest share in 2019, contributing to more than three-fifths of the global extended warranty market, as it largely covers mechanical & electrical breakdown and several other coverages, which are not covered by manufacturer's warranty. However, the accidental protection plan segment is projected to register the highest CAGR of 8.7% during the forecast period, due to rise in awareness toward security measures for ATM machines and implementation of advance technologies.
The mobile devices & PCs segment to manifest highest CAGR through 2027
By application, the mobile devices & PCs segment is expected to register the highest CAGR of 8.7% during the forecast period, as these devices are designed as a portable and easy to use including tablets, e-readers, and smartphones, and desktop or laptop computer. However, the automobiles segment held the largest share in 2019, accounting for nearly two-fifths of the global extended warranty market, due to increase in sales of extended warranty at the time of purchase of vehicles.
North America held the lion's share
By region, the market across North America contributed the highest share in 2019, holding more than two-fifths of the market, owing to adoption for extended warranty insurance in the region. However, the global extended warranty market across Asia-Pacific is projected to register the highest CAGR of 10.2% during the study period, due to emerging economies, high costs of repairs, several offers & benefits, and better customer experience provided under extended warranties in the region.
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