Saudi Arabia Consumer Electronics Report Q2 2016
BMI View: We maintain a subdued outlook for the consumer electronics market in Saudi Arabia due to thenegative shocks related to the global collapse in the price of oil. We believe that weaker consumerconfidence will continue to exacerbate the drag on consumer electronics spending due to saturation indevice categories such as tablets and LED/LCD TV sets. This underpins our forecast for muted growth inthe Saudi consumer electronics market over 2016-2020 at a compound annual growth rate of 0.8%. Whilethe overall environment will be challenging we identify lucrative opportunities for vendors in the premiumsegment, namely high-end smartphones and OLED TV sets, due to high incomes and a fashion-consciousdomestic consumer base. The low end of the market may however be constrained due to the exit of aconsiderable number of migrant workers under the governments 'Saudisation' policy.Latest Updates & Industry Developments
Computer Hardware Sales: Set to decrease from USD4.29bn in 2016 to USD4.19bn in 2020, a CAGRof -1.3%. The market outlook was already subdued due to high device penetration and the potential forprice erosion, including in the tablet market, but this was exacerbated by the weaker economic outlookand we now expect the market to contract over the medium term.
AV Sales: USD1.60bn in 2016 to USD1.73bn in 2020, a CAGR of +1.6%. After three successive yearsof contraction we envisage a return to growth, although not to previous highs due to cannibalisation ofdigital camera volumes, with the increased popularity of OLED TV sets providing a boost to marketvalue.
Handset Sales: USD6.15bn in 2016 to USD6.61bn in 2020, a CAGR of 2.0%. The handset market willoutperform based on the strength of demand for premium devices, and particularly phablets.
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