Boston, MA -- (SBWire) -- 07/13/2013 --The Iranian consumer electronics has many attractive underlying features, such as a large population and low penetration of PCs and smartphones, meaning significant opportunities still exist for vendors. However, this potential will not be realised in the coming years, barring a dramatic turnaround in the political situation. US trade sanctions apply not only to devices but to components from US companies, and with sanctions tightened they are affecting companies that simply prioritise access to the US market above Iran. A further drag on sales growth comes from the actions of Iranian authorities to restrict access to internet content. Sanctions have resulted in some positive developments, for instance the creation of a local manufacturing sector, which has the potential to achieve scale via servicing a population of 74mn. We believe the market lacks the technical expertise to launch products that rival major international brands and consumers have already demonstrated an ability to acquire devices from neighbouring markets, meaning demand levels for domestically produced devices are uncertain.
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Headline Expenditure Projections
- Computer Sales: US$4.7bn in 2013 to US$6.3bn by 2017; a rise of 32% over the forecast period. Low PC penetration means significant potential, but recent currency devaluations and US sanctions have put the market on a lower growth path.
- AV Sales: US$2.2bn in 2013 to US$2.8bn in 2017; a rise of 26% over the forecast period. The recent launch of digital broadcasting offers opportunities, but demand is nevertheless likely to be weakest in this segment.
- Handset Sales: US$1.8 in 2013 to US$2.5 in 2017; growth of 40% over the forecast period. The handset market is the fastest growing and most dynamic, with strong competition and the proliferation of smartphone ownership.
Risk/Reward Rating
Iran's score was 45 out of 100, the second lowest in the region, ahead of only Egypt. Iran's score for Industry Risks drags down its high potential returns, while it has the lowest score in the region in the Country Risks category. Iran could rise up our ratings table over time if the political situation improves and sanctions are lifted.
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New Market Report: Iran Consumer Electronics Report Q3 2013
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