We downgraded the forecast for the South Korean consumer electronics market in the Q415 update, with weak H115 sales and deterioratingeconomic confidence after the slide in regional equity markets in August 2015 behind the revision. These developments have extended our pre-existing view for contraction of all three market segments due to market saturation and relatively weak upgrade momentum due to a lack of push factors. For instance, in the smartphone market,not only is penetration high, but LTE handsets and phablets have also already passed through the initial boom phase. Meanwhile, in the AV segment,HD TV set ownership is widespread, and in the PC market, all core markets are saturated. Although market maturitymeans South Korea will significantlyunderperform emerging markets in the region,we stress that itwill remain lucrative in per capita spending termsand offer vendors higher margin sales opportunities than much of the rest ofAsia Pacific.
Computer Hardware Sales: USD10.77bn in 2014 to USD9.4bn in 2015, -12.7% in US dollar terms. A volume contraction in the desktop, notebook and tablet markets, combined with price erosion, will result in a double-digit contraction in computer hardware market value in 2015.
AV Sales: USD3.33bn in 2014 to USD2.73bn in 2015, -18.0% in US dollar terms. The unit erosion of the digital camera market will continue, but it is a decline in TV set sales in 2015, the largest component of the AV market, that will drive segment underperformance again in 2015.
Handset Sales: USD6.87bn in 2014 to USD6.13bn in 2015, -10.8% in US dollar terms. Smartphone saturation, lengthening replacement cycles and price erosion will combine to drive a fourth successive year of contraction in overall handset market value.
TABLE OF CONTENTS
Industry View SWOT Consumer Electronics Market Political Economic Operational Risk Industry Forecast Table: Consumer Electronics Overview (South Korea 2013-2019) Macroeconomic Forecasts Economic Analysis Table: Economic Activity (South Korea 2010-2019) Industry Risk Reward Index Table: Asia CE Risk/Reward Index - Q315 Market Overview Computers Table: PC Sales (South Korea 2013-2019) AV Table: AV Sales (South Korea 2013-2019) Mobile Handsets Table: Mobile Communications (South Korea 2013-2019) Consumer Electronics Industry Competitive Landscape International Companies Table: Hewlett Packard Local Companies Table: LG Electronics Table: LG Display Table: SK Hynix Industry Trends And Developments Table: Major Cyberattacks And Information Leaks Company Profile Samsung Electronics Table: Financial Performance By Division, 2011-2014 Demographic Forecast Table: Population Headline Indicators (South Korea 1990-2025) Table: Key Population Ratios (South Korea 1990-2025) Table: Urban/Rural Population & Life Expectancy (South Korea 1990-2025) Table: Population By Age Group (South Korea 1990-2025) Table: Population By Age Group % (South Korea 1990-2025) Methodology Industry Forecast Methodology Sector-Specific Methodology Sources Risk/Reward Index Methodology Sector-Specific Methodology Table: Consumer Electronics Risk/Reward Index Indicators Table: Weighting Of Indicators