China Consumer Electronics Report Q4 2015
BMI View: We downgraded the growth outlook for China's consumer electronics market in Q415 to reflectthe slightly weaker economic outlook and the diminished growth prospects as a result of rapid rises indevice penetration rate in several key categories such as smartphones, tablets and LCD/LED TV sets overrecent years. As a result of relatively high device penetration rates in the context of China's GDP percapita, a product of the strong base of local manufactures right across the device spectrum, medium termgrowth will underperform the growth trajectory 2011-2014. Nonetheless the sheer scale of the marketmakes it central to vendor strategies and we believe there is scope for vendors to capitalise on economictrends to increase performance. For instance, broad based income growth and the boost from the packageof economic and social reforms announced by the government in late 2013 should boost consumption overthe medium-term and allow vendors to target higher margin premium device sales growth.
Headline Expenditure Projections
Computer hardware sales: USD78.3bn in 2014 to USD75.8bn in 2015, -3.2% in US dollar terms.Weaker than expected demand for notebooks and tablets reported by retailers in H115 resulted in adowngrade to the 2015 outlook.
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