Vietnam Consumer Electronics Report Q2 2016
BMI View: Vietnam's consumer electronics market was boosted by tariff reductions and retail sectorliberalisation in 2015, factors that will diminish and so spending is forecast to decelerate to a CAGR of6.5% over 2016-2020. The growth story is still positive, based on rising household incomes in a marketwhere device penetration rates are still low. This will see volumes and value increase as consumers acquiretheir first devices alongside an easing of price sensitivity in higher value consumer segments. Our bullishcore scenario is, however, susceptible to downside risks including a hard landing in China or a broaderemerging market debt crisis, and potential for overcapacity and intense vendor competition to erodemargins.Latest Updates And Industry Developments
Computer Hardware Sales: USD1.7bn in 2016 to USD2.1bn in 2020, a compound annual growth rate(CAGR) of +6.2%. Outlook downgraded in Q216 due to expectation for greater cannibalisation of tabletpurchases by smartphones, but overall outlook still positive due to income growth trends.
AV Sales: USD1.2bn in 2016 to USD1.5bn in 2020, a CAGR of 4.4%. Rising incomes and digitalmigration will support expansion of flat-panel TV set sales, which has substantial potential whencompared to higher income emerging markets.
Handset Sales: USD3.4bn in 2016 to USD4.5bn in 2020, a CAGR of 7.4%. First-time smartphoneupgrade potential is still significant, with penetration estimated at around 35% at YE15, and will continueto drive handset spending growth for the duration of our forecast period.
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