Boston, MA -- (ReleaseWire) -- 10/03/2012 -- BMI View: projects that Russian consumer electronics spending will grow by about 13% in US dollar terms in 2012, after Russian retailers such as M.video and Euroset reported another year of strong growth in sales of consumer electronics devices in 2011. The Russian consumer electronics market is expected to increase at a double-digit CAGR over BMI's five-year forecast period, driven by the growing popularity of digital lifestyle products like digital TV sets, notebook PCs, digital cameras and portable audio devices. The planned roll-out of digital TV broadcasting to 95% of Russian citizens by 2015 and investment in 3G and 4G mobile communications infrastructure will boost spending. Growth will be slower in our forecast period, compared with the preceding five years, but rising computer penetration, higher incomes and immense potential for spending by Russia's more remote regions all provide longterm grounds for optimism.
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Headline Expenditure Projections
Computer hardware sales: US$10.4bn in 2011 to US$11.8bn in 2012, +14.0% in US dollar terms. Forecast in US dollar terms was upwardly revised due to strong sales growth in Q112. AV sales: US$7.6bn in 2011 to US$8.2bn in 2012, +8% in US dollar terms. Forecast in US dollar terms unchanged, with flat-screen TV set sales the main growth area. Handset sales: US$6.0bn in 2011 to US$7.0bn in 2012, +18% in US dollar terms. Forecast in US dollar terms unchanged, but there is a large digital divide between urban centres such as Moscow, where mobile penetration is more than 200%, and rural regions, where penetration is far lower.
Russia's score was 52.8 out of 100.0 and it was in third place in our latest CE RRR table. Given its undoubted market growth potential, Russia is expected to rise to a higher position in our tablet over time.
Key Trends & Developments
- The flat-screen TV set market still is far from saturated, particularly in remote areas. In the major cities of European Russia, rising incomes, new house builds and interest in luxury items will ensure growing demand for digital. The government has set a target for every Russian citizen to have access to at least 24 digital TV channels by 2015, with the amount of funding for digitalisation reportedly RUB76.3bn.Russia is expected to roll out digital services gradually, starting from Russia's Far East and South Siberian regions, followed eventually by all populated localities.
- Demand for smartphone and higher end feature phones will help prevent stagnation in the handset market, despite the slowing subscriber growth rate. In Q112, smartphones accounted for 28% of all handsets sold at cellular provider MTS's retail chain and 64.8% of sales in monetary terms. By the end of 2011, smartphones accounted for around 18% of Russian handset sales by volume.
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