Boston, MA -- (SBWIRE) -- 03/21/2013 -- Executive Summary

BMI projects that Mexican consumer electronics spending will grow by about 7% in US dollar terms in 2013, to US$13.98bn. This is faster than previously forecast, but with demand constrained by an uncertain economic outlook. While we remain optimistic toward Mexico's growth story over the medium term, we foresee a slowdown in coming quarters as external demand moderates, feeding through to weaker consumer confidence and weighing on private consumption. In 2012, growth of remittances remained weak. The US economy is sluggish and credit growth is expected to tighten. However, we expect continued demand for flat-screen TV sets, tablets, notebooks and smartphones to be driven by product innovation, such as smart TV sets, and growing affordability, particularly of smartphones.

Headline Expenditure Projections:

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Computer hardware sales: US$7.2bn in 2012 to US$7.5bn in 2013, +6% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst adjustment, and migrations to Windows 8 should provide a boost to hardware upgrades in 2013.

AV Sales: US$2.1bn in 2012 to US$2.3bn in 2013, +9% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst adjustment, with TV sets expected to provide the most dynamic development.

Handset Sales: US$3.8bn in 2012 to US$4.1bn in 2013, +7% in US dollar terms. Forecast in US dollar terms upwardly revised, with smartphones the main revenue growth driver.

Risk/Reward Rating: Mexico scores 50.6 out of 100.0, ranking fourth out of eight countries in our latest Americas consumer electronics risk/reward ratings table. BMI expects rising penetration of consumer electronics devices such as smartphones and flatscreen TV sets.

Key Trends & Developments:

- A significant growth opportunity exists in provincial areas and second-tier cities, where multinational vendors are now trying to strengthen distribution. Mexico's under-penetrated southeast region is expected to offer growth opportunities over BMI's five-year forecast period, particularly in the public sector.
- Digital TV sets will account for of the majority of sales by 2017 and TV revenue will account for a similarly high portion of total AV demand. Mexico has one of the region's highest TV household penetration rates, but continued growth should be driven by increased demand for multiple set ownership.

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