Mobile Edge CEO interviewed in OC Business Journal

By Sarah Tolkoff, Orange County Business Journal Staff

The county is home to at least three makers of cases, backpacks and related accessories for computers and other electronics.

They are part of an increasingly competitive niche in which back-to-school gear is targeted for laptop-toting high schoolers, college students and even young professionals.

“This whole category has gotten so competitive in the past seven or eight years,” said G. David Cartwright, cofounder and chief executive of Anaheim’s Mobile Edge LLC. “The number of players in the case market has probably grown tenfold.”

Mobile Edge is in the thick of the competition. The company is headquartered across the street from the 800-pound gorilla in the market—Anaheim’s Targus Inc., which holds claim to some 60% of the market for laptop bags sold in stores.

There also are a slew of other big names in the industry, including Irwindale-based Incase Designs Corp., Colorado’s Case Logic Inc. and New York’s Built NY Inc., among many other smaller companies.

“The number of companies jumping into this category has been kind of mind-boggling,” Cartwright said.

For the past decade or so, high-end backpacks, laptop bags and neoprene slipcases have seen rapid growth as notebook computers get cheaper and more accessible.

“The notebook business has been growing at a 30% to 40% rate,” Cartwright said. “There was so much growth that it seemed to be an optimistic area to jump into.”

Cartwright of Mobile Edge: business “gotten so competitive.” Cartwright is an industry veteran and one of the founders of Targus.

In 2001, he stepped down from his post as president after a split with Targus’ private equity parent and founded Mobile Edge. He took with him a handful of managers from Targus.

The company sees an estimated $50 million in yearly sales.

Targus, which is a dominant player on store shelves, sees an estimated $500 million in annual revenue.

There’s healthy competition between Targus and Mobile Edge, which cater to slightly different markets. Mobile Edge has tried to distinguish itself by creating laptop bags and purse-like totes specifically for younger folks and women.

“We are getting away from the standard black box that a lot of people relate to laptop cases,” Cartwright said.

Targus’s bread and butter are the standard attache-style case for business people on the move. It branches out a bit when addressing the student market with backpacks, messenger bags and sleeves made in a couple of colors and from eco-friendly materials.

Back-to-school shopping is a big time for both.

“I can say that back to school is typically our No. 1 or No. 2 biggest time of the year for revenue,” said Al Giazzon, vice president of marketing at Targus.

College bookstores increasingly are looking to stock backpacks and other cases to make up for sales lost on textbooks and other course materials, which more students now get online.

“There’s so much actual textbook revenue they’ve lost because so many are available online,” Cartwright said. “They are trying to replace revenue with high-margin accessory items, like cases.”  Having hip designs is a big pull for backpack makers targeting students.

“Ten years ago, people were buying cases just for protection,” Cartwright said. “Now, it’s really changed where it’s a much more fashion-oriented product. People want stuff that fits in with their self-image.”

In 2008, Mobile Edge bought the Bay Area’s HS International LLC for undisclosed terms. The deal gave Mobile Edge the Sumo brand, best known for its fashionable laptop cases geared for Apple Inc.’s MacBooks. Its cases feature a distinctive motif—a silhouette of a squat sumo wrestler.

“The sumo brand has been terrific for us,” Cartwright said. “It’s geared toward 15- to 30-year-olds and it has a lot of bright color.”

To read the full article click here to visit the Orange County Business Journal.

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