India Consumer Electronics Report Q2 2016
BMI View: India is a leading global opportunity for medium-term consumer electronics spending growth.Low penetration rates, even compared to other emerging markets, mean there is potential to sell to firsttimebuyer households, as well as replacement devices to the middle class. We expect this potential to beunlocked over the medium term by a positive transformation of India's household income profile, with thenumber of USD5,000-plus annual income households expected to increase by over 70mn 2016-2020.
Another positive is the increase in local assembly of handsets and tablets, with further upside if this extendsto manufacture of components, and if the government broadens the incentive packages of the 'Make InIndia' initiative to other device categories.
Latest Updates And Industry Developments
Computer Hardware Sales: USD17.8bn in 2016 to USD23.6bn in 2020, a CAGR of 7.2%. Risingincomes the foundation for robust medium-term outlook, with further upside if computer productionhardware incentives are extended under the 'Make In India' initiative.
AV Sales: USD15.2bn in 2016 to USD20.0bn in 2020, a CAGR of 7.2%. Large LCD/LED upgradeopportunity remains, in contrast to most of emerging APAC, but there will be a slight drag from digitalcamera volume cannibalisation as smartphone ownership widens.
Handset Sales: USD18.1bn in 2016 to USD24.4bn in 2020, a CAGR of 7.9%. Smartphone market willmaintain robust volume growth over the medium term, and drive handset segment outperformance, butwe caution overcapacity could ultimately put pressure on margins.
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