Boston, MA -- (ReleaseWire) -- 11/29/2012 -- BMI projects that Hong Kong consumer electronics spending will grow by about 5% in US dollar terms in 2012 to US$4.4bn, but a moderation in consumer demand is expected. Vendors anticipate bright spots such as tablets and ultrabooks, but a wealth effect from any cooling in property prices and an equity market that appears to have peaked could have an impact on consumer spending. BMI expects consumer electronics to outperform general retail sales, and the release of Windows 8 will provide a boost to the PC market. However, demand has been muted by slowing inbound tourism as well as poor domestic consumer sentiment. Sales trended upwards in 2011, with year-on-year (y-o-y) growth in key product categories such as TV sets, tablet computers and digital cameras. Product innovation will continue to drive growth in the AV segment, while demand will continue to be spurred by the influx of mainland tourists.
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Headline Expenditure Projections
Computer hardware sales: US$2.3bn in 2011 to US$2.5bn in 2012, +6% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification and growth areas will include demand for tablets and ultrabooks.
AV sales: US$1.4bn in 2011 to US$1.4bn in 2012, +3% in US dollar terms. Forecast in US dollar terms unchanged, with TV sets expected to provide the most dynamic development.
Handset sales: US$502mn in 2011 to US$554mn in 2012, +10% in US dollar terms. Forecast in US dollar terms unchanged with smartphones the main revenue growth driver.
Hong Kong's score was 65.8 out of 100.0, which gave it third place in our latest Asia CE RRR table. The country's relatively high CE Industry Risk and Country Risk scores were offset by its relatively small market size. BMI expects Hong Kong to remain an important regional market, with rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets.
Key Trends & Developments
- Hong Kong retailers are optimistic that product releases such as lower-priced ultrabooks and the 'new iPad' will keep sales of mobile computers at a high level in 2012. Tablets, originally seen as primarily a consumer device, are forecast to experience increasing take-up in the business segment. Meanwhile, we are also looking to ultrabooks as a new growth area.
- A combination of new technologies such as 3D and internet-enabled TV, and more competitive pricing, should help to support AV demand. To maintain or increase sales volumes, vendors will focus on product innovation, with drivers including improved display quality and wider screens, as well as design and features such as wireless technology. In 2011 there were reports that average prices had stabilised or increased across the flat-screen TV set category due to an improving economy and new high-end features.
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