LifeProof has built a burgeoning business on the strength of a slim, protective iPhone case. What does it do for an encore?
It puts a new product in consumers’ hands. A hardened case for the popular iPad tablet computer is due out this month.
LifeProof’s case for the Apple Inc. iPad, dubbed “nüüd,” will be available by mail order starting July 16 and will be at Best Buy Co. Inc. stores in August. LifeProof’s suggested retail price is $129.99.
The case protects the iPad against shock while leaving the glass of its touch screen exposed. Its seal protects the electronics from dirt and moisture, while keeping the device functional.
Users can take their tablets 2 meters underwater without damaging the electronics. When a reporter visited last week, LifeProof CEO Gary Rayner set his encased iPad to play audio. Then, without ceremony, plopped it into a container of water. The iPad continued to play.
“It’s not just a parlor trick,” said Rayner. “You can fearlessly take this now wherever you want to be,” he said, referring to the iPad tablet.
The case uses two vacuum seals to keep the iPad dry.
All other cases with built-in screen protectors have a plastic sheet and air gap that significantly degrades the visual clarity and touch experience, say LifeProof marketing materials. With the nüüd naked screen technology, there is absolutely nothing between you and the iPad, providing uncompromising visual clarity and the most intimate touch experience.
LifeProof says it has spent approximately $10 million, including legal fees, developing its protective cases for iPhones and iPads.
Intellectual Property Dispute
Reflecting the competitive state of the market, LifeProof is engaged in a legal dispute over intellectual property.
Colorado-based OtterBox has sued LifeProof, claiming the San Diego company infringed its patents. LifeProof denied the allegation in court papers and is fighting the case.
“We don’t define ourselves in terms of the competition. We define ourselves in terms of our vision,” said Rayner.
LifeProof has applied for 17 U.S. patents, said James Nolan, the company’s vice president for business and legal affairs.
At the same time, LifeProof also has to deal with growth. The company has gone from 65 employees in March to 120 today. LifeProof will soon vacate 12,500 square feet of offices in Kearny Mesa in favor of 25,500 square feet in Carmel Mountain Ranch, Rayner said.
Rayner claims that LifeProof is the fastest growing company in San Diego, though the firm does not disclose revenue and, because of that, has not appeared on the San Diego Business Journal’s list of fast-growing private companies.
Rayner said he would like to reach $1 billion in sales by 2016. “We have a clear path to get there,” the CEO said.
Rayner, a serial entrepreneur whose previous venture was DriveCam Inc., began LifeProof in 2009 in Australia. He moved it to the United States in 2010. He said the firm hit a milestone in March when it sold its 1 millionth iPhone case.
ABI Research reports the market for smartphone accessories is now $20 billion. By 2017, the market for smartphone accessories is expected to grow to $38 billion.
Michael Morgan, senior analyst for mobile at ABI, noted that LifeProof sells its iPhone cases for a fairly high price point: $80. Meanwhile, handset technology will continue to evolve. For one thing, phones may get more rugged. “They need to look at other value propositions beyond just protection to maintain that price point over time,” Morgan said.
Rayner argues there are several kinds of iPhone cases. He counts five.
Inexpensive cases may prevent a phone from being scuffed. Some cases are decorative items, used to dress phones in animal skin patterns or designer logos.
A third variety protects a phone from moisture but is bulky and does not allow an owner to use all of a phone’s features. A fourth type of case is rugged, protecting phones from a long drop. “OtterBox is a market leader” in ruggedized cases, Rayner said.
A Different Species
Rayner said the LifeProof case is a different species. It protects a phone from 2 meter drops and lets people submerge a phone under up to 2 meters of water, while maintaining the phone’s usability.
And it maintains one other thing, Rayner said: the slim profile that Apple gave its iPhone.
“People pay a lot” for the slender iPhone profile, Rayner said, asking why anyone would want to put it in a “bulky box.”
LifeProof sells its phone cases through Target Corp., AT&T Inc., Sprint, Radio Shack Corp., Staples Inc., REI, and in select overseas retailers.
Rayner says his company has a history of innovation, adding there is more to come.
“You ain’t seen nothing yet,” he said.