Malaysia Consumer Electronics Report Q2 2016
BMI View: Malaysian consumer electronics demand will begin to recover in 2016 from a sharp contractionin US dollar terms in 2015 when ringgit depreciation and the introduction of the Goods and Sales Tax hitthe market. Conditions will however, remain challenging due to further ringgit depreciation, but therecovery should gain momentum from 2017. We expect all three device segments to return to growth from2017 onwards as the household income growth dynamic gains strength, with an added boost as deferredpurchases from 2015 and 2016 are unlocked. The expected gains for Malaysia's middle class could alsoease price sensitivity and enable vendors to benefit from higher value sales and wider margins, althoughthis will rely on industry overcapacity being avoided. We forecast total device spending will increase at aCAGR of 5.8% over 2016-2020 as a whole.
Latest Updates And Industry Developments
Computer Hardware Sales: USD1.9bn in 2016 to USD2.6bn in 2020, a compound annual growth rate(CAGR) of 7.3%. A more supportive economic environment and a shift in product cycle dynamics willsee the hardware segment regain momentum and growth in value and volume terms.
AV Sales: USD737mn in 2016 to USD886mn in 2020, a CAGR of 4.7%. The AV market is expected tostrengthen markedly over 2016-2020 due to a more supportive economic backdrop and upgrade triggersin the form of smart and Ultra-HD TV sets.
Handset Sales: USD2.6bn in 2016 to USD3.1bn in 2020, CAGR of 4.9%. Value growth expected toslow over the medium term as the smartphone market becomes increasingly saturated and reliant onreplacement sales.
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