Boston, MA -- (ReleaseWire) -- 05/05/2014 -- BMI projects that Indian consumer electronics spending will grow by about 16% in US dollar terms in 2014 to US$43.4bn, fuelled by rising incomes, growing affordability, and the fact that 45% of India's population is under 25. PC market growth is currently being driven by laptops and by tablets, albeit sales of the latter are growing from a very small base. Meanwhile, sales of smartphones - including Apple's iPhone - are finally taking off. Spending on consumer electronics devices is projected to grow at an overall CAGR of 14% through to the end of our five-year forecast to 2018, with the key segments including low-cost mobile handsets, colour TV sets, set-top boxes and notebook computers. Much of the growth during our forecast period will be driven by growing demand from India's underpenetrated rural areas. However, there are concerns a new import tax on handsets priced at above 2,000 rupees could constrain demand in this key product category.
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Headline Expenditure Projections
- Computer Hardware Sales: US$11.3bn in 2013 to US$13bn in 2014; +14.0% in US dollar terms. Forecast in US dollar terms unchanged but tablets and Windows 8 devices will be areas of growth.
- AV Sales: US$15.3bn in 2013 to US$17.8bn in 2014; +17% in US dollar terms. The result is unchanged, with TV sets expected to provide the most dynamic development as households upgrade to digital.
- Handset Sales: US$10.8bn in 2013 to US$12.6bn in 2014; +16% in US dollar terms. This figure is unchanged, with vendors likely to increase their focus on semi-urban rural customers, but a new import tax could add 8%-9% to the cost of some handsets.
India's score is 49 out of 100, putting it in eighth place in our latest Asia Central Europe Risk/Reward Rating (RRR) table. BMI expects India to rise up the table over time as a result of economic growth and the potentially vast market in rural and semi-rural areas.
Key Trends & Developments
For the 2012/13 financial year, the Manufacturers' Association for Information Technology (MAIT) reported that sales of PCs in urban areas amounted to 11.17mn units, which corresponded to a growth rate of 5%. Within this figure, sales of desktop computers were up by 1% to 6.77mn, while sales of laptops were up by 10% to 4.40mn. However, the main area of growth was in the tablet sector, with sales shooting up by as much 424% to reach 1.90mn units.
According to the most recent Voice & Data survey, total sales of mobile handsets in India amounted to INR359.5bn in the 2012/13 financial year, which represented a growth rate of 14.7%. Notably, Samsung overtook Nokia to become the leading brand, with the company benefiting from the fact that it offers phones at a wide range of price points, thereby fulfilling the needs of a wide range of customers.
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