Bahrain Consumer Electronics Report Q2 2012

Bahrain’s consumer electronics devices market, defined as the addressable market for computing devices,mobile handsets and AV devices, is forecast at US$655mn in 2012. This is expected to increase toUS$882mn by 2016, driven by demand for feature-rich digital lifestyle products such as LCD TV sets,notebook computers and other key products, as well as the ongoing development of the electronics retailsector.

Bahraini demand for AV products continued to grow in 2011, despite the political disturbances.Consumer spending continued to grow impressively, and rocketing private sector credit growth andstrong retail sales imply a healthy consumer sector that should keep growth sustained. However, whilespending should continue to be solid, the days of Bahrain’s consumer boom are over, with shoppers likelyto have been scarred by the downturn of 2008-2009. Ongoing political unrest could hit consumerconfidence and deter investors while the rise in global oil prices that has accompanied the disturbanceswill provide a boost to Bahrain's finances.

Going forward, however, product innovation, lower prices and greater vendor and channel salesflexibility will support growth in consumer electronics spending, along with a resumption of low singledigitpopulation growth.

Computers

Computer hardware accounted foraround 34% of Bahraini consumerelectronics spending in 2011. BMIforecasts Bahraini domestic marketcomputer hardware sales (includingnotebooks and accessories) ofUS$224mn in 2012, up fromUS$211mn in 2011. Computerhardware compound annual growthrate (CAGR) for the 2012-2016 periodis forecast at about 6%, led bynotebooks and netbooks, whichcurrently account for about 60% ofsales. Bahraini fixed and mobiletelecoms operators have launched a series of services and promotions targeted at PC users.

AV Devices

AV devices accounted for around 54%of Bahraini consumer electronicsspending in 2011. The Bahrainiaddressable AV device market isforecast at US$354mn in 2012. Themarket is expected to grow at a CAGRof 8% during 2012-2016, drivenlargely by demand for LCD andplasma TV sets, to a value ofUS$482mn in 2016. In the currenteconomic climate, Bahraini consumersare looking for high-end features andperformance at more affordable prices.

Mobile Handsets

Mobile handset sales accounted foraround 12% of Bahraini consumerelectronics spending in 2010. Bahrainimarket handset revenues are expectedto grow at a CAGR of 7% toUS$102mn in 2016 despite mobilepenetration passing 180%. There willbe growing demand for smartphonesand 3G handsets, with the increasedrollout of 3G networks and the launchof BlackBerry services by Zain andnew operator VIVA.