South Africa Consumer Electronics Report Q2 2016
BMI View: We have made further negative revisions to our forecast over the next five-year period for theSouth African consumer electronics market in our Q2 2016 report update to account for the stronger-thananticipatedrand depreciation against the US dollar. Consumer electronics device spending growth in SouthAfrica has been negatively impacted by economic weakness in 2013-2015, with the squeeze on spendingfrom rand depreciation against the US dollar most significant in the PC and AV segments. Randdepreciation eroded South African household purchasing power in global markets, though with the trend ofdepreciation expected to ease over the medium term, it will to some extent be offset by an increasing supplyof low-cost smartphones and tablets. Such low-cost smart devices have proved the most resilient devicecategories, as demonstrated by the popularity of smartphones launched by MTN and Vodacom, and weexpect this to remain the case over the forecast period to 2020.
Latest Updates & Industry Developments
We have made further downgrades to our forecast for the consumer electronics market due to thestronger-than-anticipated depreciation of the rand against the US dollar.
Computer Sales: USD1.71bn in 2016 to USD1.68bn in 2020, a compound annual growth rate (CAGR)of -2.6%%. Rand depreciation represents downside risk by squeezing household purchasing power,resulting in deferred purchases and substitution for cheaper models.
AV Sales: USD941mn in 2016 to USD984mn in 2020, a CAGR of 0.3%. Digital camera demandcannibalisation will continue to be a drag on growth, while TV set market has a mixed outlook due toconsiderable scope for upgrades, but also intensifying price competition.
Handset Sales: USD3.79bn in 2016 to USD3.98bn in 2020, a CAGR of 1.5%. Handset spending growthforecast to slow as smartphone market saturation occurs, but it will continue to outperform and remainthe largest segment of the South African consumer electronics market over 2016-2020.
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