Boston, MA -- (SBWIRE) -- 12/07/2012 -- BMI projects Brazil consumer electronics spending will grow by about 14% in US dollar terms in 2012 to US$35.7bn. In Q112, sales of some consumer electronics devices slowed due to seasonal factors and economic uncertainty, but we expect faster growth in H212. The extension of the government's Lei Do Bem programme to encourage local production of various products should boost the availability of affordable smartphones. In addition, tax cuts that started in Q311, particularly those aimed at durable goods such as PCs and TV sets, should support consumption over the coming quarters. Consumer electronics retailers reported strong growth in 2011 as shipments of notebooks and flat-screen TV sets surged and smartphone sales reported triple-digit growth. We expect tax cuts, aimed at durable goods such as PCs and TV sets, to further support consumption over the coming quarters. However, we eventually expect the Brazilian consumer to feel the effects of high levels of household debt and there are signs that banks are increasingly wary about increasing lending.
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Headline Expenditure Projections
- Computer hardware sales: US$11.8bn in 2011 to US$12.5bn in 2012; +5% in US dollar terms. Our forecast has been revised down due to analyst modification, following low singledigit growth in Q112, as businesses delayed investments due to economic uncertainty.
- AV sales: US$9.6bn in 2011 to US$10.2bn in 2012, +6% in US dollar terms. Forecast in US dollar term changed moderately, with flat-screen TV sets expected to provide the most dynamic development.
- Mobile handset sales: US$10.1bn in 2011 to US$12.5bn in 2012, +24% in US dollar terms. Forecast in US dollar terms unchanged, with falling prices driving the smartphone market.
Risk/Reward Rating: Brazil's score is 62.6 out of 100.0, which makes it second place in our latest Americas Consumer Electronics Risk/Reward Ratings (RRRs) table. The country's huge potential market means its relatively high industry rewards score should be maintained over coming quarters. BMI expects Brazil to be one of the region's most dynamic markets over our forecast period, with digital upgrades ahead of the 2014 football World Cup and the 2016 Olympic Games providing further momentum.
Key Trends And Developments
- In 2012, despite a slowdown in Q112, PC sales are expected to continue to grow due to economic growth and low unemployment fuelling consumer confidence. PC shipments are projected to continue to increase, with the government and retail sectors at the forefront. PC market penetration is approaching about half of all households. Greater affordability combined with more credit options, lower interest rates and tax concessions will drive retail PC sales.
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