Boston, MA -- (SBWIRE) -- 07/28/2012 -- BMI expects the China consumer electronics market will grow by around 9% in 2012, which represents a moderation compared with 2011. Despite signs of an economic hard landing, Chinese retailers appeared to be optimistic about the outlook for increased sales of flat-screen TV sets and other consumer electronic products in 2012.Vendors will look to newer technologies such as Smart TVs; LED TV sets, which were expected to comprise around 50% of flat-panel sales in 2011; and 3D TV sets, forecast at around 10-20%, to drive sales. A second phase of the government's rural consumer electronics subsidy programme drove sales of computers, flat-screen TV sets and other products in H211. Electronics vendors and retailers were expanding and adjusting strategies to take advantage of this opportunity.
Headline Expenditure Projections
Computer hardware sales: US$71.9bn in 2011 to US$79.6bn in 2012, +11% in US dollar terms. Forecast downwardly revised in US dollar terms, due to macroeconomic factors, but smaller towns and rural areas will drive growth, along with replacement of desktops with notebooks.
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AV sales: US$70.9bn in 2011 to US$78.5bn in 2012, +9% in US dollar terms. Forecast in US dollar terms unchanged, with the main driver being demand for flat-screen TV sets.
Handset sales: US$39.2bn in 2011 to US$41.3bn in 2012, +4% in US dollar terms. Forecast in US dollar terms unchanged, with strong underlying growth rate of mobile subscribers.
Risk/Reward Ratings: China's score was 61 out of 100.0. China took 5th place in our latest RRR table, but due to its vast market and rising penetration has potential to rise over time.
Key Trends & Developments
- By the end of BMI's five-year forecast period, the rural PC and notebook market could account for as much as 35-40% of total China computer sales. The subsidy programme will continue to boost demand from the vast, under-penetrated rural areas. The lower-tier city and towns are expected to be the fastest growing segment of the PC market in 2012, although this has placed pressure on prices.
- After two years of robust growth in the TV market, vendors will also look to third- and fourthtier cities and rural areas to sustain demand for TV sets, after lower sales in major cities were the main cause of negative growth in H111. About 58% of LCD TV s are now sold through retail channels, with sales strongest during holiday peak shopping periods.The second phase of the government's household electronics products subsidy for rural residents also continued to be an important market driver in 2011.
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