We expect strong sales growth in the Philippine consumer electronics market over the medium term as incomes rise and device prices decline amidst intense vendor competition. We forecast growth of 7.9 % in 2015 , a slight deceleration from 2014 as the AV segment returns to a lower growth trajectory after TV set upgrade demand brought forward by the FIFA World Cup tournament in Brazil. Consumer electronics spending is expected to remain strong over the medium term , with government spending providing a stimulus supplementing technology trends such as demand for smartphones and tablets. Given the Philippines' low PC penetration, many provincial markets are relatively untapped territories, while rural populations contain the largest number of potential first-time mobile handset purchasers.
Headline Expenditure Projections
Computer Sales: USD2.1bn in 2014 to USD2.2bn in 2015, +6.8% in US dollar terms. Booming sales of Android tablets expected to continue, while we expect a resurgence in notebook sales to add to growth momentum in 2015 as vendors tap the first-time buyer opportunity.
AV Sales: USD1.1bn in 2014 to USD1.2bn in 2015, +7.3% in US dollar terms. AV sales increased markedly in 2014 as TV sales were boosted by the FIFA World Cup, but we forecast a return to a lower growth trajectory in 2015.
Handset Sales: USD3.1bn in 2014 to USD3.4bn in 2015, +8.9% in US dollar terms. The handset market will again outperform in 2015, but growth will continue to slow as price pressures in the smartphone market squeeze overall market value growth even as sales grow rapidly.
Chinese smartphone brand Xiaomi has had phenomenal success in recent years, primarily in China but increasingly across the region and global emerging markets as it widens its low margin, and unit market share and consumer loyalty maximisation strategy. In the Philippines it continued to invest in local presence in 2014, officially...
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