Boston, MA -- (ReleaseWire) -- 09/06/2012 -- BMI View: BMI expects the Croatian IT market will grow by around 3% in 2012, which is a downwards revision due largely to macroeconomic factors. In 2012 we believe that the government's introduction of a fiscal austerity budget will weaken consumer demand for durables, and we also highlight the increase in VAT to 25% from 23%. Despite these exogenous factors, we expect demand for consumer lifestyle products such as computers and TV sets to remain in positive growth territory. Consumer electronics retail sales drivers include growing affordability of digital products, retail channel expansion, digital TV conversion and 3G mobile network rollouts.
Headline Expenditure Projections
Computer sales: US$536mn in 2011 to US$541mn in 2012, +1% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, but tablets are expected to provide a growth area in 2012, with potential sales of 65,000 units.
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AV sales: US$265mn in 2011 to US$269mn in 2012, +2% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, with the main driver being demand for flatscreen TV sets.
Handset sales: US$213mn in 2011 to US$233mn in 2012, +19% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification, after strong growth in smartphone sales. Risk/Reward Rating: Croatia's score was 38.6 out of 100.0. Croatia took 7th place in our latest CE RRR table, ranking behind established EU markets such as the Czech Republic and Hungary but ahead of Serbia.
Key Trends & Developments
- A number of factors should support momentum in the Croatian computer market, including a government plan to provide 800,000 tablet computers to Grade 1 schoolchildren. Consumer demand will still continue to be the main IT market growth driver, owing to economic growth and rising income levels. Amid fierce competition, aggressive promotions and new products are likely to be unveiled by retailers, resulting in pressure on margins.
- Digital TV availability and programming should continue to expand in Croatia and should remain a driver of TV-set upgrades. While around 98% of Croatia's 1.7mn households have TV sets, there is a trend for multiple sets. Sales of LCD and plasma sets have increased as prices have fallen over the last few years. In 2011, sales of LED and LED-backlit TV sets trended upwards owing to growing affordability after their appeal was initially limited mainly to highend consumers. 3D sets and 'smart' TV sets are growth areas.
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