Boston, MA -- (ReleaseWire) -- 01/09/2014 -- Although the outlook for the Iranian consumer electronics market improved after the US lifted sanctions on handset imports in May 2013, the positive impact of the decision continues to be outweighed by economic and political challenges in the country. A further drag on sales growth comes from the government's extension of Rightel's monopoly over the 3G market until September 2014, which will limit the growth potential of 3G and sales of 3G-enabled devices. While the market is challenging for vendors, it does have many attractive underlying features, such as a large population and low penetration of PCs and smartphones, meaning significant opportunities still exist. Sanctions have resulted in some positive developments, for instance the creation of a local manufacturing sector, which has the potential to achieve scale by servicing a population of 74mn. We believe the market lacks the technical expertise to launch products that rival major international brands and consumers have already demonstrated an ability to acquire devices from neighbouring markets, meaning demand for domestically produced devices is low.
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Headline Expenditure Projections
- Computer Sales: US$4.7bn in 2013 to US$6.3bn by 2017; CAGR of 6.8% in US dollar terms over the forecast period. Low PC penetration means significant potential, but recent currency devaluations and US sanctions have dampened the market's growth prospects.
- AV and Gaming Device Sales: US$2.2bn in 2013 to US$2.8bn in 2017; CAGR of 5.3% over the forecast period. The recent launch of digital broadcasting offers opportunities, but demand is nevertheless likely to be weakest in this segment.
- Handset Sales: US$1.8bn in 2013 to US$2.5bn in 2017; CAGR of 9.1% over the forecast period. Market growth will continue to be restricted by the slow development of 3G services by telecoms operators, but increased competition in the 3G market from 2014 poses upside risks in the long term.
Iran's score was 38.8 out of 100, the second lowest in the region, ahead of only Egypt and nearly ten points behind Oman in eighth position. Iran's score is dragged down by its Industry Risks and Country Risks scores: in both categories Iran has the lowest score in the region.
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