Boston, MA -- (ReleaseWire) -- 04/29/2014 -- After a challenging 2013 during which currency depreciation and lack of access to credit on favourable terms stymied market growth, we expect consumer electronics spending growth to recover from 2014. The medium term outlook for Egypt's consumer electronic market is strong, with favourable demographics, rising incomes and investment supporting infrastructure such as telecoms networks and retail/distribution combining to drive growth. We expect total spending to increase at a CAGR of 7.9% 2014-2018, from US$3.1bn in 2014 to US$4.2bn in 2018. The strongest growth will be in connected devices such as smartphones, tablets, notebooks and smart TVs - boosted by operator and government investments in telecoms infrastructure.
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Headline Expenditure Projections
Computer hardware sales: US$980mn in 2013 to US$1.1bn in 2014, +8.9% in US dollar terms. Sales were hit by the economic and political situation in 2013, with lack of credit and currency depreciation hurting sales as price sensitive consumers defer purchases, however we expect a return to growth in 2014 as the economic environment strengthens.
AV sales: US$374mn in 2013 to US$393mn in 2014, +5.1% in US dollar terms. Flat-screen TV sets the main driver of growth, but the AV segment will remain the smallest category for the duration of our forecast period.
Handset sales: US$1.6bn in 2013 to US$1.7bn in 2013, +8.2% in US dollar terms. The handset market is the most dynamic in Egypt, boosted by the increased share of smartphones in the product mix, driving up the average selling price of handsets in the market as a whole.
Key Trends And Developments
The smartphone market was the outperforming device category in 2013, and BMI expects growth to continue over the medium term, albeit decelerating as penetration rises. Consumers in Egypt are upgrading from 2G handsets to featurephone - and smartphones - in large numbers, driving up market value even as total handset volumes plateau. In 2013 there was a notable shift in the sales mix as Nokia, which has traditionally led the market and seen success with its Asha range of featurephones, was squeezed by midand- low range Android vendors. Samsung was the main vendor to cannibalise featurephone sales, but we also point to the rising threat of Chinese handset vendors in Egypt, namely Huawei, ZTE and Lenovo.
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