Boston, MA -- (SBWIRE) -- 08/27/2012 -- BMI expects the Iranian consumer electronics market to reach US$8.1bn in 2012, with growth constrained by the impact of US sanctions, subdued economic growth and lower oil prices. The US-led drive to tighten sanctions against Iran has resulted in the US National Defense Authorization Act, However, the indirect effect of sanctions, including rampant inflation, unemployment and a collapse of the rial, could have an even more damaging impact on demand for consumer electronics. However, Iran's steadily increasing population will support private consumption growth, while demand for consumer electronics will also be fuelled by new technologies and expanding internet and mobile telecoms penetration.
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Headline Expenditure Projections
Computer sales: US$3.8bn in 2011 to US$4.2bn in 2012, +8% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors and analyst adjustment, with notebooks accounting for around two-thirds of sales.
AV sales: US$2.2bn in 2011 to US$2.2bn in 2012, +2% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, but with the recent launch of digital broadcasting offering opportunities.
Handset sales: US$1.6bn in 2011 to US$1.7bn in 2012, +10% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, but Iran's youthful market should be a promising one for smartphones.
Business Environment Rating: Iran's score was 44.1 out of 100.0 with the lowest market risk score in the region dragging down high Potential Returns. Iran took 8th place in our latest MEA BER table, but has potential to rise over time if the political situation improves and sanctions are lifted..
Key Trends & Developments
- Iran's gradual roll-out of digital TV at regional and township levels, a process that gathered pace in 2011, should stimulate replacement set purchases. In January 2012, Iran launched the first digital TV-channel in the country after the digital broadcasting system was reportedly successfully tested in October 2011. TV set vendors will also focus on product innovation, with drivers including improved display quality and wider screens, as well as design and features such as wireless technology.
- A key aspect to keeping the handset market growing will be improving mobile network coverage. Mobile penetration rates in major urban centres are much higher than for the country as a whole, and therefore the biggest growth opportunity for handset vendors will be driven by expansion of mobile networks into rural areas. Although not all smartphone applications are accessible in Iran, possession of the devices is seen as a status symbol.
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