Independent 5-year Consumer Electronics Industry Forecasts for Hungary

Hungary's consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and video, audio and gaming products, is projected at US$2.5bn in 2012. Revenues growth remained sluggish in 2011 due to consumer deleveraging, but spending is expected to increase at a CAGR of 5.4% to US$3.0bn by 2016. The main drivers include the growing popularity of digital lifestyle products such as LCD TV sets and notebook computers, as well as lower prices and more flexible terms.

The effect of the economic crisis has led to profitability crises for several Hungarian market consumer electronics retailers, with leader ElectroWorld requesting bankruptcy protection in Q111. The decision by the government to allow foreign currency mortgage holders to fix their interest payments to a more manageable exchange rate is a broadly positive development for consumption. However, the effects are unlikely to be felt until 2012, once unemployment and credit conditions demonstrate a more concerted improvement.

Despite this, rising incomes, product innovation and favourable social and demographic trends should support a long-term growth trajectory for consumer electronics spending. Mobile telecoms penetration in Hungary remains much lower than in neighbouring markets, while digital television subscriptions now account for a majority of Hungary's nearly 3mn TV subscribers.

Computers
Computer hardware accounted for about 55% of Hungary's consumer electronics spending in 2011. BMI forecasts Hungary's domestic market computer hardware sales (including notebooks and accessories) will be worth around US$1.3bn in 2012. Computer hardware CAGR for the 2012-2016 period is forecast at 5.5%, driven by sales of feature-rich notebooks and netbooks.

AV Devices
AV devices accounted for 33% of Hungary's consumer electronics spending in 2011. Hungary's domestic AV device market is forecast at US$820mn in 2012. Demand for flat-screen TV sets will be the main driver of a 2012-2016 AV spending CAGR of 4.9%, as Hungary moves towards digital broadcasting, while video devices such as flat-screen TV sets, digital cameras and VCR players account for more than 80% of demand.

Mobile handset sales accounted for 12% of Hungary's consumer electronics spending in 2011. Hungary's market handset sales are expected to grow at a 2012-2016 CAGR of 6.1% to a value of US$389mn in 2016, as the mobile subscriber penetration rate reaches 132%. Sales will be dominated by the replacement market, with growing demand for smartphones and 3G handsets. The promotion of Android models will drive smartphone sales in 2012 and Hungarian mobile operators are planning to place mobile broadband and data services centre stage in the months ahead.

TABLE OF CONTENTS

Executive Summary  5
SWOT Analysis  7
Hungary Consumer Electronics Market SWOT  7
Hungary Political SWOT  8
Hungary Economic SWOT  9
Hungary Business Environment SWOT  10
Business Environment Ratings  11
Table: Regional Consumer Electronics Business Environment Ratings 11
Consumer Electronics Market  15
Computers 17
Table: PC Sales  17
AV Devices  21
Table: AV Sales  21
Mobile Handsets  24
Table: Mobile Communications  24
Consumer Electronics Industry  29
Table: Electronics Output  29
Table: Hungary Industrial Parks And Resident IT/Electronics Companies  31
Table: Restructuring Plans Of Major IT/Electronics Companies In Hungary  32
Hungarian Industrial Sales VOl Index, Electronics and Optical Products Sept 2009 – Aug 2010  33
Table: Electronics Output by Segment  33
Table: Foreign Direct Investment By Asian LCD TV Set Manufacturers In Hungary  34
Hungarian Exports of Office Machines And Automatic Data Machines, September 2009-July 2010 (HUFmn)  34
Industry Forecast Scenario  36
Consumer Electronics Market  36
Table: Consumer Electronics Overview  36
Industry Developments 39
Macroeconomic Forecast  41
Table: Hungary – Economic Activity  42
Competitive Landscape  43
Computer  43
Handsets  45
AV  47
Domestic Company Monitor 49
Albacomp  49
How We Generate Our Industry Forecasts  50
Electronics Industry  51
Sources  51