May 18, 2024
Extended Warranty Market

Rising Demand for Extended Product Protection is Driving the Extended Warranty Market

The extended warranty market provides manufacturers and retailers an opportunity to offer consumers extended protection over and above the standard warranty period for purchased products like consumer electronics, home appliances, automobiles and industrial equipment. This gives buyers reassurance of cover against unexpected repairs or component failure during the later phase of product lifespan at a reasonable cost. The global extended warranty market provides replacement, repair, and refund services for defective products beyond the original manufacturing warranty period. With growing consumer awareness about post-purchase services, extended warranty has emerged as a valuable option for protecting investments in expensive products over longer usage durations.

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:
The extended warranty industry is witnessing expansion across multiple consumer sectors on the back of rising demand for peace of mind from unpredictable repair costs once standard warranty expires. Growing preference of customers towards all-inclusive protection plans without timeframe limitations on expensive electronic items like smartphones, laptops, gaming consoles, home appliances etc. has boosted extended warranty purchase rates in the last few years. Manufacturers are innovating coverage programs to attract more buyers and offer customizable terms for different customer segments. The market is also gaining traction due to easy claim processes, flexible payment options and increasing reliance on digital platforms for service enrollment and assistance.

Porter’s Analysis
Threat of new entrants: The threat of new entrants in the extended warranty market is moderate. The market requires significant capital and resources to build warranty programs for different products.
Bargaining power of buyers: The bargaining power of buyers is high in this market. Buyers can negotiate lower prices by shopping around for competitive offers or replacing older products with newer ones.
Bargaining power of suppliers: Manufacturers hold moderate bargaining power as suppliers since establishing long-term contracts and relationships with vendors allows warranty providers to offer competitive rates.
Threat of new substitutes: There exists a low-to-moderate threat of substitutes as certain products such as smartphones allow data backup thus reducing need for extended warranty programs.
Competitive rivalry: The extended warranty market witnesses intense competition among key players offering a wide range of programs for electronics, vehicles and other products.

Key Takeaways
Global Extended Warranty Market Size is expected to witness high growth over the forecast period supported by rising sales of consumer electronics and automotive vehicles. The market stood at US$ 123.04 Mn in 2024.

Regional analysis: North America dominates the extended warranty market followed by Europe. A large consumer base, high disposable income and reliable infrastructure are driving demand in the regions. Asia Pacific is identified as the fastest growing market with China, India and other countries expected to offer numerous opportunities.

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. These companies focus on expanding their product portfolio and strengthening distribution networks globally.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it