Bulgaria Consumer Electronics Report Q2 2016
BMI View: We have left our core outlook unchanged for the Bulgarian consumer electronics market in ourQ2 2016 report update. Lev depreciation against the US dollar hit consumer electronics demand inBulgaria hard in 2015 through the erosion of household purchasing power and therefore reduce theaffordability of imported hardware. We expect a recovery in 2016, albeit a limited one with growth of 1.6%forecast for the market as a whole, but with all three segments returning to growth. There will however bestronger growth over the medium term as economic conditions become more favourable, which will have aconsiderable impact on PC and AV sales that were hit hardest by lev depreciation. Low penetration acrossmost device categories will allow vendors to tap into the first-time buyer and upgrade/replacement marketsas incomes rise and confidence returns among households. Meanwhile, in the handset segment the growthtrend will be determined to a greater extent by product adoption trends. As the smartphone market becomesmore saturated, with first-time buyers accounting for a smaller share of annual sales, the overall marketgrowth rate will slow.
Latest Updates & Industry Developments
Computer Sales: USD350mn in 2016 to USD431mn in 2020, a CAGR of 4.3%. After a steep decline in2015 we expect spending to recover 2016-2020, with underlying demand growth from low penetrationrate and rising incomes boosted by deferred purchases from 2015.
AV Sales: USD171mn in 2016 to USD178mn in 2020, a CAGR of 0.9%. While the AV segment isforecast to recover 2016-2020, we expect it to be the underperforming segment as TV set price erosionand digital camera volume cannibalisation act as drags on growth.
Handset Sales: USD400mn in 2016 to USD475mn in 2020, CAGR of 4.1%. Increased saturation ofsmartphone market will result in growth deceleration as compared to 2011-2014, but growthopportunities remain and potential for increase in premium device sales in the later years of the forecastperiod.
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