Poland Consumer Electronics Report Q1 2013

BMI expects the Poland consumer electronics market will grow by around 4% in 2013, with fastergrowth likely as the eurozone economy picks up in the second half of the year.

Household income growth is likely however to remain subdued into mid-2013. Household balance sheetswill also dampen private spending into H113. The effects of strong credit growth in 2006-8 are still beingfelt on households..

Over the five-year forecast period however, BMI forecasts a steady increase in spending on digitallifestyle items such as smartphones and LED TV sets, driven by rising disposable incomes, consumersseeking choice and low prices offered by foreign and domestic chains.

Headline Expenditure Projections

Computer hardware sales: US$3.5bn in 2012 to US$3.7bn in 2013, +4% in US dollar terms.Forecast in US dollar terms downwardly revised due to macroeconomic factors growth, butPoland remains on course to close the PC ownership gap with Western Europe.

Handset sales: US$2.0bn in 2012 to US$2.1bn in 2013, +9% in US dollar terms. Forecast in USdollar terms unchanged, with strong growth expected in smartphone sales.

AV sales: US$2.4bn in 2012 to US$2.6bn in 2013, +8% in US dollar terms. Forecast in USdollar terms unchanged, with growth areas including HD TV, 3D and smart TV.

Risk/Reward Rating: Poland's score was 54.7 out of 100.0 with a high Market Risk and Country Riskscores of 70 and 73.3 respectively. Poland took first place in our latest Emerging Europe CE RRR table,and looks set to be one of the best regional CE market prospects over our five-year forecast period.

Key Trends & Developments

By 2017, BMI forecasts that non-LCD and plasma models will comprise only about 10% of TV sales,although there currently remains demand for larger analogue models. TV revenue accounts for more than50% of total AV demand, although lower average prices of flat screen TV sets will restrain revenuegrowth. Expanding availability of digital and HD TV broadcasting will drive demand for a higher qualityviewing experience as consumers upgrade their sets to digital.

Growing competition and operator promotions will drive smartphones sales and in 2012 smartphonesrepresented a majority of handset models offered by Poland's telecoms operators. In the case of mobileservice provider Play, smartphones accounted for 80% of handsets on offer, while the equivalent figurefor Orange Poland was 70%. Bundling attractive hardware such as smartphones and netbooks is onemethod being pursued by the operators in their attempts to woo higher value customers.

BMI projects that PC penetration could reach about 75% by 2017. In the medium term, a quick look atPoland's forecast growth trajectory reveals how quickly Poland could close the PC ownership gap withWestern Europe as incomes increase, driven by the effects of EU membership.