Boston, MA -- (SBWIRE) -- 02/12/2013 -- BMI View: We project that US consumer electronics spending will grow by about 4% in US dollar terms in 2012, with growth areas including smartphones and smart TV sets, but question marks remain about the sustainability of consumption in the absence of strong wage growth.

Smartphone sales increased by around 9% in H112and surveys indicate increasing smartphone ownership among lower-means households, with annual incomes of US$35,000 or below. Surveys suggest returning consumer confidence, but vendors will largely rely on product innovation such as smart TV sets to drive growth. Falling average prices in many product categories will place revenue and margins under pressure. However in 2011, sales of consumer electronics products such as notebooks, smartphones and LEDbacklit TV sets grew steadily as the recovery gathered traction, although in H112 the consumer outlook remained mixed.

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Headline Expenditure Projections

Computer hardware sales: US$142bn in 2011 to US$147bn in 2012, +3.6% in US dollar terms. Forecast in US dollar terms unchanged, but ultrabook failed to provide the hoped-for support to PC sales in H112.

AV sales: US$65bn in 2011 to US$69bn in 2012, +6% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification, following evidence that U.S. consumers are willing to pay more for features such as 3D and large-screens.

Handset sales: US$30bn in 2011 to US$32bn in 2012, +7% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification but Android phones continue to dominate the growing smartphone segment.

Risk/Reward Rating:

The USA's score was an unchanged 76.4 out of 100.0, which gave it first place in our latest Americas CE RRR table. The country ranked first in its region for all component scores including Market, Country Structure, and Country and Market Risk. Despite its current economic challenges, BMI expects the US to retain its significance as the world's largest and most influential consumer electronics market.

Key Trends & Developments

- The average price of a flat-screen TV set in the US market rose slightly in Q212, reversing a long-established trend, and indicating that consumers are willing to pay more for features such as web browsers and 3D. Mature markets in many AV segments mean growth will rely to a large extent on new technologies and features to drive sales of smartphones, as well as LED, internetenabled and 3D TV sets.
- US PC sales are forecast to report single-digit growth in 2012, after a further annualised contraction in Q212. In H112, sales of ultrabooks fell far short of Intel's prediction that Ultrabooks would comprise 40% of US notebook sales by the end of 2012.

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