BMI View: A more bearish outlook for forint depreciation in 2015 has resulted in a downgrade to the consumer electronics spending growth outlook for Hungary. The PC and AV segments are expected to be hit harder than handset sales due to the higher average selling price, reduced ability to absorb price increases and the lesser necessity of PC or TV ownership versus mobile handsets. The forecast is for a return to growth from 2016, and acceleration in 2017, as the forint strengthens and underling economic conditions become more favourable. The outlook is however weaker than many other markets of comparable income levels even once the economic environment becomes more supportive due to the weak household income growth trend in Hungary. We expect some growth in premium households, but in the mass market we expect weak household growth and continuing price sensitivity, reducing the scope for sale of higher value devices, which will become a more important driver of overall spending growth as vendors increasingly rely on upgrade sales due to saturation.
Headline Expenditure Projections
Computer Hardware Sales: USD841mn in 2014 to USD701mn in 2015, a decrease of 16.6%. A slowdown in tablet sales and the fact desktop and notebook upgrade demand was brought forward to 2014 by XP support withdrawal, will exacerbate the negative impact of depreciation of the forint in 2015.
AV Sales: USD497mn in 2014 to USD413mn in 2015, -16.9% in US dollar terms. Forecast downgraded in Q4 to reflect our view for faster forint depreciation, and TV set upgrade momentum dynamics are considered relatively weak even over the medium term.
Handset Sales: USD708mn in 2014 to USD709mn in 2015, +0.1% in US dollar terms. Significant value growth slowdown from 2014, but outperformance gap to other consumer electronics segments will remain wide in 2015 despite the impact of depreciation.
|Forint Depreciation To Hit PC And AV Sales Hardest In 2015|
|Hungary Consumer Electronics Segment...|
The Hungary Consumer Electronics Report has been researched at source and features latest-available data covering both the manufacture and sale of consumer electronics products, critically analysing - and forecasting - the market dynamics affecting each sub-sector, including audio-visual, computers, mobile handsets, gaming and automotives electronics. Furthermore, the report analyses the domestic and global economic trends driving device demand and provides company rankings and competitive landscapes covering leading multinational and national consumer electronics companies and analysis of latest industry news and trends in Hungary.
BMI Research's Hungary Consumer Electronics Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the consumer electronics industry in Hungary.
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BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering consumer electronics, major investments and projects.
Consumer Electronics Market
Analysis of the size of the domestic market for electronics products, with in-depth assessment and data covering the dynamics driving each sub-sector; audio-visual, computers, mobile phone handsets and gaming devices, as well as demand for automotives electronics.
Analysis and data of the domestic electronics manufacturing sector. We assess the regulatory and business operational issues facing manufacturers - including openness to foreign investment, infrastructure, IP issues and the global demand context - and their impact on the production of electronics goods, which is again broken down via market sub-sectors.
Industry Forecast Scenario
Historic data series and forecasts to end-2018 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key risks to the main forecast, covering computers, communications and gaming devices. Indicators include:
Industry value (US$bn); population (mn); nominal GDP (US$bn); real GDP growth (%), GDP per capita, industrial production Index (% y-o-y ave.) unemployment % of labour force.
Business Environment Rankings
BMI's Consumer Electronics Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors and participants in the regional consumer electronics market. The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.