Boston, MA -- (ReleaseWire) -- 01/03/2014 -- South Africa's consumer electronics market was buffeted by Macroeconomic headwinds in 2013, such as the weakening of the local currency, and a general decline in demand for PCs. However, we expect the market to rebound in 2014 on the back of greater stability in the domestic economy and higher wages. We expect the AV segment to perform strongly during, driven by the purchase of digital TV sets and set-top boxes in the run-up to the deadline for the switchover from analogue to digital broadcasting. We also forecast strong growth in the handset segment as phone users upgrade to smartphones to take advantage of greater 3G/4G network coverage and declining mobile data tariffs.
Headline Expenditure Projections
- PC Sales: US$3.6bn in 2013 to US$3.8bn in 2014, +6% in US dollar terms. Forecast in US dollar terms downgraded to reflect the impact of currency weakness and decline in demand for PCs.
- AV sales: US$1.5bn in 2013 to US$1.7bn in 2014, +10% in US dollar terms. Forecast in US dollar terms unchanged, with digital TV sets and set-top boxes expected to drive growth in 2014.
- Handset sales: US$1.6bn in 2013 to US$1.8bn in 2014. Forecast in US dollar terms unchanged, with smartphones the main revenue growth driver.
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Risk/Reward Rating: South Africa's score was 53.6 out of 100, earning it 6th place in our RRR table. We expect rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets. However, a large grey market and limited internet access outside major cities and towns pose downside risks to growth.
Key Trends & Developments
Leading AV products vendors introduced new high-end TV sets in 2013, targeting a niche segment of the market. LG launched the country's first curved OLED (organic light-emitting diode) television in November, while Samsung launched its 85-inch ultra high definition (UHD) TV in July. Both TV sets, along with similar high-spec models launched by other vendors, retail at ZAR200,000 or more.
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