Global pc electronics

Global Consumer Electronics:
Trends, Developments and Insights

June 2009

Consumer Electronics-Trends © Euromonitor International >

Scope
Global Performance
Regional Trends
Regional Market Insights
Global Consumer Electronics Trends
Channel Analysis
Category Analysis
Competitive Landscape
Future Trends and Developments

2

Scope Consumer Electronics-Trends © Euromonitor International >

Scope
This presentation on the world market for consumer electronics covers the following products:

2008 Global
Consumer Electronics
2.7 billion units

In-home Portable In-car Computers*
1.2 billion units 1.4 billion units 144 million units 192 million units

Televisions and Cameras In-car media players Desktops
Projectors
Camcorders
VCRs and DVD In-car speakers Laptops
Players
Portable Media players

TV and VCR/DVD Navigation systems
Mobile phones
Combinations
Other in-car
Home Audio and Portable computers electronics
Cinema

Personal Computers

*duplicate (desktops and laptops under computers are also included within personal computers and portable computers, respectively)
Disclaimer
Much of the information in this presentation is of a statistical nature and, while every attempt has been made to ensure accuracy
and reliability, Euromonitor International cannot be held responsible for omissions or errors
Figures in tables and analyses are calculated from unrounded data and may not sum
3


Scope
Global Performance
Regional Trends
Channel Analysis
Category Analysis

4

Global Performance Consumer Electronics-Trends © Euromonitor International >

Volume Performance
Volume sales for in-home consumer electronics were
CE Market in Volume (2003-2008)
highest in the Asia-Pacific region. At the end of the
3.0 50 review period, the region accounted for more than
45 44% of overall global volume sales.
2.5

Year-on-Year growth
40 Global volume sales of in-car consumer electronics
35 reached more than 144 million units in 2008,
billion units

2.0
30 reflecting robust demand in China (28% of total
1.5 25 sales), USA (17.4%), Japan (8.4%) and Germany
20 (6%).
1.0 15 Global volume sales for computers grew to nearly
0.5 10 193 million units in 2008, with heaviest sales (32%)
5 coming from the Asia-Pacific region.
0.0 0
2008 Volume Share by Sector
2003 2004 2005 2006 2007 2008
In-home consumer
Total Volume Volume Growth 6.6% 41.6%
electronics

4.9%
Portable consumer
Volume sales of consumer electronics products grew at electronics
a CAGR of 11.3% between 2003 and 2008, reaching
2.7 billion units in 2008. Over the same period, value
In-car consumer
sales increased at a CAGR of nearly 14%, reaching electronics
more than US$739 billion in 2008. (aftermarket)
Overall CE volume sales were boosted by strong sales Computers
of portable consumer electronics and the increasing 46.8%
popularity of miniaturization.

5

Global Performance Consumer Electronics-Trends © Euromonitor International >

Value Performance
Regions with strong contributions to value sales CE Market in Value(2003-2008)
performance included Eastern Europe, Latin America,
Asia Pacific and Australasia. Growth sectors like mobile 800 25
phones, multimedia players and in-car consumer 700

Year-on-Year growth
electronics bolstered market performances in those 20
600

$ USD billion
areas.
500 15
In-home consumer electronics was the best performer 400
with nearly 48% of global value sales in 2008. This 10
300
performance, however, represented a sales decrease
from prior year due mainly to declining unit prices of 200
5
major in-home consumer electronic products. 100
Countries with strong value sales growth during the 0 0
review period included Argentina (47% CAGR) for in- 2003 2004 2005 2006 2007 2008
home products, Poland (28% CAGR) for portable
products and South Africa (64% CAGR) for in-car Total Value Value Growth
products.
Consumer Electronics CAGR Value While the global financial crisis did not affect overall value
Performance performance in the sector in 2008, future performance is
20 uncertain as, inevitably, product distributors will be forced
to reduce unit prices in order to continue attracting
17.5 17.7 customers.
CAGR %

15

10 13.3 Consumer demand for sophisticated, compact and well-
10.3 designed products always drove sales in the global CE
5 market. Due to market setbacks, however, many
households are showing a degree of cautiousness and
0 many consumers are beginning to seek out the best
In-home Portable In-car Computers value for their money.

6


Scope
Global Performance
Regional Trends
Channel Analysis
Category Analysis

7

Regional Trends Consumer Electronics-Trends © Euromonitor International >

Western Europe
Volume sales in Western Europe grew at a CAGR of 7.2% over
Western Europe Volume Share
the review period, reaching 530 million units in 2008.
(2008)
United Kingdom made the biggest contribution to the region‟s Others
Austria
2% Belgium
volume sales in 2008 with nearly 20% of the total. This was 10% 2%
followed closely by Germany with 18.3%.
Portable consumer electronics turned out to be the most United
significant sector in the regional CE market. In 2008, volume Kingdom France
20% 14%
sales reached more than 280 million units, accounting for nearly
53% of overall volume sales in Western Europe.
There is increased demand
2008 Highest Performing among Western European
Electronic Products in consumers for portable Germany
Western Europe (volume) consumer electronics products 18%
such as portable computers,
% Share Turkey
media players and mobile
4%
Mobile phones 29.3 phones. Mobile phones
emerged as the best- Sweden
2% Greece
Personal computers 15.6 performing product in terms of 2%
volume sales with more than Spain
Televisions and 155 million units sold in 2008. 10% Nether- Italy
Portugal
12.7 lands 10%
projectors 2%
Value sales in the Western 4%
European consumer
Computer peripherals 12.4 France recorded the highest value sales with
electronics market reached
US$37.4 billion, representing growth of more
more than US$200 billion in
than 25% over prior year. The impressive
Portable media 2008, reflecting a CAGR of
9.5 performance was due in large part to sales of
players nearly 13% over the review
high-priced televisions and projectors.
period.
8


Eastern Europe
2008 Eastern European Countries Volume sales of consumer electronics in Eastern Europe
(volume share) reached nearly 170 million units in 2008, representing a CAGR
of 16.2% during the review period.
Romania
8% Russia contributed the most to volume sales with nearly 82
million units sold in 2008. Russia was followed by Poland,
Romania and Hungary.
Poland Russia
48% More than 55% of overall volume sales of consumer electronics
19% products in Eastern Europe came from the portable consumer
electronics sector in 2008.
Value sales in Eastern Europe reached more than US$46 billion
Hungary in 2008. Between 2003 and 2008, value sales grew at a CAGR
6% of nearly 25%.
Others
19% 2008 Top 10 Electronic Products in E Europe
Mobile phones was the most significant consumer % volume share
electronics subsector in Eastern Europe in 2008. Mobile 1 Mobile Phones 26.2
phones represented 70% of overall volume sales of 2 Laptops 13.5
portable electronics and nearly 50% of total portable value
sales. 3 Desktops 12.3
Value sales for laptops reached more than US$6.2 billion 4 Digital TVs 9.9
in Eastern Europe in 2008, followed closely by value sales 5 HDTV (High Definition TV) 7.6
for desktops which came in at nearly US$5.7billion. 6 Computer peripherals 7.1
One factor influencing purchasing behaviour in Eastern 7 Digital cameras 5.7
Europe is that CE products are regularly on sale not only 8 Monitors 4.9
in specialist shops but also in consumer electronics
9 Digital camcorders 3.0
supermarkets. Overall declining unit prices also play an
important role in driving volume sales. . 10 Portable media players 3.0

9


North America
Volume sales of CE products in North America reached
2008 North America Volume Shares
more than 515 million units in 2008, representing a
CAGR of just over 7% during the review period. Of that 600 1.8
2008 total, nearly 474 million units (92%) were sold in 1.6

Year-on-Year growth
500

In million units
the United States. 1.4
400 1.2
Value sales grew at a CAGR of 8.2% between 2003
1.0
and 2008, reaching US$147.3 billion in 2008. In the 300
0.8
US, value sales reached US$135 billion in 2008, a
200 0.6
slight decline over prior year.
0.4
Sales of digital electronics continued to dominate the 100
0.2
North American flat-panel market in 2008. Lower prices 0 0.0
and the wider range of screen sizes were among the
2003 2004 2005 2006 2007 2008
key factors spurring consumer demand for HDTVs.
Canada Volume USA Volume
2008 Top 10 Electronic Products
in North America Canada growth rate USA growth rate
% volume share Increased demand among busy consumers for portability drove
1 HDTV (High Definition TV) 20.6 sales of mobile phones and laptops, positioning them as the
2 Mobile phones 18.5 second and third hottest products (in terms of value sales) in
3 Laptops 15.6 the North American consumer electronics market.
4 Computer peripherals 9.2
Depending on the severity of the recession and the possibility
5 Desktops 6.2 of unexpected oil price spikes, the consumer electronics sector
6 Digital cameras 5.3 in the region could face a bumpy road in the short term. At the
7 Monitors 5.0 same time, the long-term economic outlook for the region is
8 Portable multimedia players 3.6 risky due to high trade and budget deficits, historically low
9 Printers 3.1 household savings rates and mounting consumer debt, all of
10 Navigation systems 2.8 which are expected to begin to affect performance in the sector.
10


Latin America
Volume sales for consumer electronics in Latin America reached 2008 Latin America Volume Share
almost 202 million units in 2008, representing a CAGR of 14.8%
CAGR during the review period. Brazil emerged as the dominant Others
market, accounting for almost 47% of total Latin American 18% Argentina
13%
volume sales. Value sales reached US$64.5 billion in 2008.
Portable consumer electronics was the most dynamic CE
sector, recording volume sales growth of 18% in 2008. Mobile
Mexico
phones dominated this sector, accounting for more than 78% 17%
volume sales.
Personal computers was the leader in the in-home CE sector in
2008, accounting for 55% of total volume sales. Televisions and
projectors ranked second, accounting for nearly 21% of volume
sales.. Chile
5%
Almost 79% of the portable consumer electronics sold in Latin
America were mobile phones, an indication of the popularity of
communicating on-the-go. Brazil
47%
2008 Latin America Consumer Electronics
Volume Sales In-car media players was the leading subsector in the
120
Latin American in-car consumer electronics
Million units

100
95.1 100.3 subsector in 2008 with just over 59% of total volume
80
sales. In contrast to the dwindling popularity of in-car
60
CD players in markets like North America, in Latin
40
16.7 America these products continued to show
20 6.4 remarkable growth with volume sales increasing at a
0
CAGR of 18.4% during the review period. Demand
In-home Portable In-car Computers for in-car CD players was particularly high in Brazil.
(aftermarket)

11


Asia Pacific
2008 Asia Pacific Volume Share Volume sales of consumer electronics in Asia-Pacific
Japan reached more than 1.13 billion units in 2008,
India
17% 13% representing a CAGR of more than 14% during the
Malaysia review period. China emerged as the biggest market in
1% volume terms with 49% of the region‟s total volume
South sales in 2008.
Korea
5% Value sales of consumer electronics products grew at a
CAGR of nearly 15% during the review period, reaching
Taiwan more than US$232 billion in 2008.
2%
In-home consumer electronics was the largest sector
accounting for 47% of total volume sales in 2008.
Rest of However, it‟s expected that portable consumer
Asia Pacific electronics will replace in-home CE in the top position by
13% the end of 2009.
China
49% Asia Pacific CE Value Sales
250

High Definition TVs (HDTVs) were one of the most 200
dynamic products in the in-home CE market in the Asia- US$ million
150
Pacific region. Volume sales of HDTVs grew at a CAGR
of more than 185% during the review period. 100
Portable media players showed robust sales 50
performance thanks to the popularity of mobile phones,
0
which raked in value sales of more than US$67 billion in
2008. 2003 2004 2005 2006 2007 2008
China Japan South Korea India
Strong sales of laptops and digital cameras reflected
Taiwan Malaysia Singapore
the growing popularity of portability in the region.
12


Australasia
2008 Australasia Market Performance Portable CE products were the most popular among
consumers in Australasia. Mobile phones, laptops and
50 50
digital cameras continued to show consistent growth.
million units

US$ million
40 40
Consumers are demanding devices that enable them to
30 30 access whatever content they want, when they want it.
20 20 Portable computers, portable media players and devices
10 10 like personal video recorders (PVR) and Internet
Protocol TV (IPTV) are experiencing strong growth and
0 0 generating a great deal of consumer interest in
2003 2004 2005 2006 2007 2008 Australasia.
Volume Value
Consumers showed high interest in converged
Volume sales for consumer electronics in Australasia electronics products as they address a number of
reached more than 44 million units in 2008, household and professional needs.
representing a CAGR of 10% between the 2003 and
2008. Portable consumer electronics emerged with the 2008 Top 10 Electronic Products in Australasia
highest volume sales in the sector with 47% of the total
% value share
in 2008. Value sales reached over US$14 billion in
1 Mobile phones 25.2
2008.
2 Desktops 16.2
In terms of value sales, HDTV was the best performer in 3 Laptops 13.4
the in-home consumer electronics sector with sales of
4 Computer peripherals 10.9
nearly US$597 million in 2008. The demand for high
5 Digital cameras 6.8
definition television coincides with the need for
consumers to replace their analogue TVs in preparation 6 Printers 4.8
for the shift to digital broadcasting in the region. 7 Monitors 4.3
8 HDTV (High Definition Television) 4.2
Sales of desktops continued to increase, reaching
volume sales of more than 2.2 million units and nearly 9 Portable media players 3.4
US$2.3 billion in 2008. 10 Projectors 2.9

13


Middle East and Africa
During the review period, value sales of consumer Top Performing Electronic Products in Middle East
electronics products in Middle East and Africa market and Africa 2003-2008 (volume)
grew at a CAGR of 13.6%, reaching more than US$34.8 2003-2008
billion in 2008. Sales of portable consumer electronics CAGR
were the primary driver of growth, accounting for more 1 Projectors 32.5
than 50% of value sales in 2008. 2 Mobile phones 26.4
Over the same period, volume sales grew at a CAGR of 3 Digital TVs 25.2
15.5%, reaching nearly 130 million units in 2008. 4 Printers 24.9
Volume sales of portable consumer electronics products 5 Portable multimedia players 21.3
reached nearly 68 million units in 2008. 6 HDTV (High Definition Television) 21.2
7 Laptops 21.1
In the in-home consumer electronics sector, televisions 8 Hand-held televisions 20.8
and projectors were the best performers with volume 9 Converters, decoders and receivers 17.7
sales of nearly 14 million units in 2008. Demand for high 10 Digital cameras 15.0
definition television is slowly increasing among
consumers who are seeking to replace their analogue Among portable consumer electronics products, mobile
products with digital formats. phones were the market leaders with more than 54 million
2008 Middle East and Africa Market units sold in 2008. This represented a CAGR of 26.4%
Performance between 2003 and 2008. Consumers in the Middle East
In million units

150 50 and Africa are increasingly demanding fashionable mobile
US$ million

40 phones with high mobile content capabilities.
100 30 Consumers in the Middle East and Africa bought more
50 20 desktops than laptops in 2008. Desktops accounted for
10 nearly 56% of overall computer volume sales.
0 0 Sales of in-car speakers led the in-car consumer
2003 2004 2005 2006 2007 2008 electronics sector. In 2008, in-car speakers generated
Volume Value sales of US$142.5 million.

14


Scope
Global Performance
Regional Trends
Channel Analysis
Category Analysis

15

Regional Market Insights Consumer Electronics-Trends © Euromonitor International >

Western Europe
The 19% decline in the consumer confidence index in Consumer Confidence Index in
Western Europe in 2008 was a response to the onset Europe January 2008 – January 2009
of the global economic downturn. Sales of expensive 0.0
products like in-home audio/video products and other
-5.0
products related to entertainment will be the hardest hit
over the forecast period as consumers begin to rein in -10.0
their spending on non-essential items. -15.0
In the wake of the current credit crisis, banks in the UK -20.0
have implemented stricter rules regarding the provision -25.0
of consumer credit, resulting in a decline in automobile -30.0
sales. In turn, sales performance in the in-car
-35.0
consumer electronics subsectors will be affected.
-40.0
High prices of in-home consumer electronics products,
combined with the current high levels of personal debt,
slowed sales growth in the subsector. In contrast,
sales in the portable consumer electronics subsectors Germany France UK Eurozone
remained relatively buoyant in Western Europe as
consumers continued to demand products that Spaniards are increasingly moving to single-family
informed and entertained them on-the-go. houses located on the outskirts of major cities. The
With fewer children, Italians tend to have average commuting time spent going to and coming
home from work (whether by public transport or by
more disposable income to spend on
private car) has increased considerably, driving
consumer goods in general and on demand for portable media players and in-car media
consumer electronics in particular, players.
especially in-home products.
16


Eastern Europe
Eastern European countries face the continuing prospect
of declining populations, declining birth rates, increased
death rates and negative net migration, all factors that are
Population expected to contribute to a negative impact on demand for
Decline consumer electronic products.
FDI into Eastern Europe and CIS countries declined in
2008-2009, exacerbating unemployment rates in countries
Decreasing like Bosnia, Ukraine and Kazakhstan, among others. This,
Shrinking CE Increasing
Foreign Direct Market in turn, has led to a further decline in consumer
unemployment
Investments Opportunities confidence, forcing many Eastern Europeans to focus on
priority expenditures rather than on consumer electronic
products.
A number of financial institutions in countries like Estonia,
Unstable Ukraine, Croatia and Latvia have been directly affected by
financial the US sub-prime mortgage crisis. CE companies linked
institutions
to these banks have had to consolidate unprofitable
channels and review existing product lines in order to
sustain profitable economies of scale.
“Grey” market activities are affecting the
The consumer electronics market in Eastern manufacturing of consumer electronics in Eastern
Europe has been characterised by mergers among European countries. Illegal market operators offer very
major market players and the development of low prices that domestic producers cannot match.
franchises, resulting in more diversified product Multinational companies that have built factories in
ranges and in companies expanding into the Eastern Europe also feel the influence of the illegal
Russian market to increase their market shares. market, particularly in sales of portable CE products.

17


North America
As a result of the credit crisis, access to consumer credit
declined as banks tightened lending requirements. As a
Sales of Exisiting Houses in the US
consequence, the number of consumers who can borrow January 2008 – January 2009
Nov 4.5
to buy homes has decreased, and this has led to lower
Oct 4.9
demand for in-home consumer electronics products.
Sep 5.1
The slowdown in the US housing sector led to large
Aug 4.8
increases in unemployment in 2008, and this is expected
Jul 5.0
to continue into 2009. This situation has contributed
greatly to the decline in consumer confidence and, in turn, Jun 4.9
it is expected to have a negative impact on consumer May 5.0
expenditure on durable goods and consumer electronic Apr 4.9
products. Mar 4.9
American Baby Boomers (those born between 1947 and Feb 5.0
1966), considered to be the wealthiest generation, are Jan 4.9
now approaching retirement. Their past interest in
consumer electronics is likely to decline as they pursue 4 4.2 4.4 4.6 4.8 5 5.2
million
other interests.
The Generation Y demographic in North America The growth of private label products in North America
(those now between the ages 13 and 31) has changed the relationship between the larger retailers
emerged as an important driver of consumer and their supply base. When Best Buy and Wal-Mart
expanded their private label offerings, their influence
electronics sales. This group represents varying
over suppliers increased. Power within the supply chain
life stages, and thus they seek a diverse range of
gradually shifted from traditional original equipment
consumer electronics products. Regardless, as a manufacturers (OEM) to electronics manufacturing
group their main focus has been on portable services (EMS) providers and original design
electronics, such as mobile phones and MP3 manufacturers (ODM), who work directly with retailers to
players. develop private labels.
18


Latin America
Falling remittances from Latin American workers in the USA
had an impact on consumer spending in their home countries.
Remittances are a crucial source of funding for many in Latin
America. In particular, they often bolster household purchases
of consumer electronics products in the region.
Overseas
Consumer demographics in Latin America are changing. The
remittances
increase in female employment has contributed to income and FDI
growth in many households, and this has resulted in more
disposable income being used to buy luxury items. Women
consumers are driving demand for portable laptops, mobile
phones and MP3 players with stylish designs. Product
export
The recession and the global concern regarding the mounting (services
difficulties in the world financial markets has affected Latin and raw
American consumers. Many take more time to consider what materials)
are now important spending decisions, and this puts many
consumer sectors at risk. The consumer electronics sector,
however, may avoid this, as most of the products they offer
deliver entertainment, communication or information, services Strong growth in credit cards, particularly
that often allow consumers to escape the discomfort of store credit cards, is shaping the Latin
uncertain and difficult times. American retail market. The financial
sector has government support in this
Fashion and technology have combined to effort as using financial instruments helps
become a powerful force in driving the reduce the need and expense of printing
introduction of new consumer electronics money.
products in Latin America.

19


Asia Pacific
Economic growth in the Asia-Pacific region has turned Asia Pacific Equity Index Losses:
lethargic as a result of the global economic slowdown.
July 2007 - December 2008
China's stock exchange lost more than 47% of its value
60
in 2008 due to concerns about declining export
demands and slower growth. This led to more caution 50
among consumer electronics manufacturers, many of

Equity Index
40
which considered postponing research and development
efforts (and costs) in order to focus on more pressing 30
business ventures.
20
An export-oriented economy, Japan has been
particularly affected by the global economic slowdown, 10
resulting in a decline of 12.1% in annual real GDP 0
growth in the fourth quarter of 2008. This drop caused
alarm among market players in Japan. Several
companies with global market presences in the
consumer electronics sector sought to redirect efforts
towards reviewing existing marketing strategies to % decline
sustain economies of scale.. Source: 2009 Euromonitor from Bloomberg
Demand from „tween‟ (preteen) and teenage population
groups in the Asia- Pacific region tend to influence the In most countries in the Asia-Pacific region,
direction of marketing and product development efforts economies are primarily cash-based. This
undertaken by major consumer electronics players.
provides growth opportunities for mobile
Demand from consumers in the region is polarized
payment support structures which could, in
between premium products, which provide an edge in
computing and technology, and mass-based products turn, drive increased demand for more
that cater to the lower end of market. sophisticated mobile phones.

20


Australasia
Employment Population in Australasia
Australasia is in a better position to weather
(2003-2008)
the global financial crisis than other
8
developed regions. Labour markets are
7
tighter there than in Europe and the USA,
and the region‟s main trading partners,
6 countries in the Asia-Pacific region, still
expect growth in 2009.This has bolstered
confidence among major consumer
million

5
electronics players operating in the region, all
4 of whom intend on continuing to provide
consumers with more formidable products
3 borne out of more confident marketing,
research and technology.
2
Many Australians perceive urban lifestyles to
1 be increasingly uncomfortable, and many
have decided to move to more affordable and
0 less stressful locations. Large population
2003 2004 2005 2006 2007 2008 shifts like these often drive new purchases
and replacement purchases of consumer
Male Female
electronic products.
While overall expenditure has been softening, anticipated strong employment figures may support increased
consumption. Labour markets in the region remain tight and job losses are still anticipated, but they are
expected to be low compared to other regions, which bodes well for the consumer electronics sector over the
forecast period.

21


Due to their relative insulation from the world's Consumer Confidence in Selected
financial system, countries in the Economies: 2006-2008
Middle East (except for UAE) and in Africa have
120
been among those least affected by current global

Consumer Confidence Inex
financial crisis. Because of this, major global 100
consumer electronics players are planning launches
in the region to offset losses from underperforming 80
flagship products in other markets.
Demographic features evident in most countries in 60
the region include rapid population growth and a
40
high proportion of young people in the total
population. The Africa and Middle East region has
20
the youngest population among all of the world's
regions, and this is a sales opportunity, particularly 0
for portable CE products. Demand for laptops,
2006 1H 2006 2H 2007 1H 2007 2H 2008 1H 2008 2H
mobile phones and portable multimedia players has
increased. South Africa Saudi Arabia UAE Egypt

Source: Mastercard

Many parts of Africa lack political security, and this has scared off many major consumer
electronics players from entering markets in the region. There are a number of “conflict
situations” and domestic and cross-border disputes, with the situation in Darfur, Sudan
being the best known. Political turmoil threatens economic progress in Chad, Côte d'Ivoire,
Eritrea, Ethiopia, Guinea, Lesotho, the Seychelles, Somalia and Zimbabwe, and this has had
an effect on the consumer electronics markets in these countries.
22


Scope
Global Performance
Regional Trends
Channel Analysis
Category Analysis

23

Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >

Western Europe: Hi-tech and Green

The introduction of flat-screen digital TV in Belgium
drove increased sales of decoders that allowed
consumers to adapt to digital TV at lower prices. Spain
followed suit with the introduction of HDTV.

As of March 2008, all manufacturers are required by the
French government to offer only digital TVs. As an EU
member, Greece is required to shift to digital
broadcasting by 2012.

Energy-saving and non-toxic products drove sales in
Germany as concerns about global climate change
heated up. “The Green Grid” initiative was introduced
by processor company AMD and it clients HP, IBM and
Sun.

In Italy, mobile phones (3G handsets) drove sales the
consumer electronics market, especially handsets with
clamshell shapes, black design, high-resolution
cameras, MP3 players and Bluetooth connectivity. In
the UK, iPhones continued to see increased sales.

24


Eastern Europe: Go Digital

Poland intends to produce approximately 38 million TVs
for the European market by 2010 in factories in Nowa
Sola, Wroclaw, and Kobierzyce. With a focus on LCD
technology, industry analysts claim Poland can be the
„the counterpart of China‟ in Europe.
Left Inset: A Toshiba production plant in Kobierzyce
Photo courtesy of Toshiba Corp

Sales of in-car DVD players strengthened
the overall in-car consumer electronics
market in Romania.

Home theatre in a box (HTiB) continues to drive
sales in the overall home cinema and speaker
systems sector in Russia.

25


North America: Advancing Technology

Private label brands in North America are expanding
into portable consumer electronics. Wal-Mart offers
multimedia players under its iLO and Siren brands while
Best Buy offers its low-priced DVD and MP3 players
under its Insignia brand.

The availability of high-speed networks such as
3G (and potentially 4G) provides American
consumers with the ability to stream video and
access other advanced wireless features via
their mobile phones.

4G Samsung P9000

Canadians increasingly replace their old CRT
computer monitors with new LCD screens.

26


Latin America: Looking for Cheaper Alternatives

Flash drive memory, considered a cheaper alternative to
hard drive and micro hard drive units, emerged as the
preferred storage format in Argentina.

Brazil rallied behind the production and sale of
low-cost 3G mobile phones that offered internet
connectivity, email and video features.

Distributors in Chile and Mexico saw declines in
unit prices of consumer electronics products as
imported brands entered the market.

27


Asia Pacific: Getting the Best in Technology

Despite the introduction of several new competitive
brands in the market, Chinese consumers still consider
brand image (the combination of low price and high
technology) as the fundamental reason to buy a product.

India‟s multi-brand retail chains
Croma, Vijay Sales and Vasanth &
Co. gave consumers more options
by providing a wider array of
sophisticated electronic products.

Having launched its Next-Generation
Networks (NGN), Japan is now ready
for the introduction of a long list of new
electronic products. The government
has developed a strategy that
facilitates the entry of next-generation
network-capable consumer electronics.
NGN Process:
Courtesy of Ericsson Corporation

28


Asia Pacific: Getting the Best in Technology

Taiwanese consumers preferred large LCD TVs
screens, usually 37-inches or more. Local
manufacturers are able to develop advanced products
at lower material costs thanks to the ready supplies of
TFT LCD panels in the country.

Demand for premium consumer electronics products in
Singapore was bolstered by the launch of HD television
channels, as well as by the aggressive promotion of
HDTV content and services by the government and
industry players.

The Malaysian government encouraged the adoption of the
Terrestrial Digital Video Broadcasting (DVB-T) standard for
broadcasting transmissions and rolled out digital
transmission in and around Kuala Lumpur in 2009. It‟s
hoped that it will expand nationwide by 2013.

A DVB-T receiver commonly used in Malaysia.

Demand in South Korea is for slim,
compact and colourful mobile phones,
reflecting the attractiveness of these
products among younger consumers.

29


Australasia : Balancing Technology and Environment

The Australian government declared that all new TVs
must comply with its 10-point energy ratings scheme
that allows consumers to quickly see which television
screens are best for energy consumption.

Many environmentally conscious consumers are
putting off purchasing new televisions until
manufacturers demonstrate their environmental
credentials.

The entry of LG Electronics into the New Zealand market in
2007has allowed consumers there to enjoy fully the digital
technology lifestyle.

In 2009, the popular media device TiVo was launched
in New Zealand. TiVo promises to turbocharge free-to-
air digital TV and put viewers in control.

Logo courtesy of Tivo Inc

30


Middle East and Africa: New Opportunities

Lenovo‟s first attempt to enter the
Middle East market was with its Idea
Pad „Netbook‟ in 2008. The initiative
confirmed the region‟s appetite for
sophisticated technology.

Idea Pad „Netbook‟

Touch screen technology is catching on in the
Middle Eastern market. Sony Ericsson introduced
its Xperia X1 mobile phone which boasts a full
QWERTY keyboard and a three-inch touch
screen.

Sony Ericsson Xperia X1 mobile phone

In South Africa, infrastructure development projects are
underway in preparation for the 2010 soccer World
Cup. These projects may pave the way for increased
demand for a wide range of consumer electronics
products over the next years.

31


Scope
Global Performance
Regional Trends
Channel Analysis
Category Analysis

32

Channel Analyses Consumer Electronics-Trends © Euromonitor International >

Western Europe

Despite the continued prevalence of durable goods retailers in
the region, hypermarkets have emerged as key distribution
channel. Western Europe is undergoing channel transition,
away from traditional mixed retailers and durable goods
retailers. Hypermarkets are able to cross-subsidize expansion
into non-traditional segments. They also wield increased
bargaining power over manufacturers, resulting in lower prices
and increased pressure of manufacturers‟ profit margins. A hypermarket in Spain
Photo courtesy: Mondragon Corporation

Durable goods retailers remained popular in the higher
end of the market, where many consumers require
personalised service. Many customers remain loyal to
their local suppliers, especially those that provide
comprehensive after-sales service and offer free
product delivery and home service installation.
A durable good retailer outlet in Belgium
Photo courtesy: ADEG Österreich Handels AG

Grocery retailers have been focused on products
positioned in the lower and middle tiers of the sector.
However, they are slowly integrating premium products
into the mix in order to satisfy demand from the higher
end of the market.

A Tesco outlet in the UK
Photo courtesy: Tesco Corp

33


Eastern Europe

Russian consumers increasingly preferred to buy CE products
in specialist shops. This has encouraged the development of
retail chains and has led to increased competition, which has
resulted in lower prices and improved customer service.

A computer electronics specialist store in
Russia

Hypermarkets and supermarkets are becoming the
prevalent distribution channels in Eastern Europe.
These retailers offer a wider range of electronic
products, giving consumers more options and ensuring
Rimi hypermarket in Latvia
they get the best value for their money.
Photo courtesy: Rimi Baltic

Altex expanded its presence in Romania by
increasing to 14 the number of stores it
operates in the country.

A retail chain store operated by Altex in Romania

34


North America

Best Buy, Circuit City and Wal-Mart are the big players Kiosks revolutionized retail in the
in the North American CE retail sector, offering US. Manufacturers and distributors
consumers the widest array of consumer electronics placed kiosks in high-traffic areas
brands. and improved channel‟s image
among consumers.

Dell kiosk (above), Sony kiosk (below)

35


Latin America

In Latin America, consumers preferred
durable goods retailers, shopping in
chain stores directly operated by major
market players.

Right inset: One of the 200 Red Megatone
retail stores in Argentina.

Brand loyalty is an influential factor in the
Latin American CE market. Gradiente,
Brazil‟s flagship brand, maintains traditional
distribution sites as well as online site that
offers consumers a wide range of consumer
electronic products.

A Gradiente webpage.

Many Mexican consumers are attracted by
the less expensive options offered by
discounters such as Bodega Aurrera,
Tiendas ISSSTE, Bodega Comercial
Mexicana and Bodega Gigante.
Bodega Aurrera in Mexico

36


Asia Pacific

Many major players in the Asia-Pacific market
enthusiastically expanded their retail spaces in order to
broaden their offerings of consumer electronics products.

Gome and Suning became the biggest two specialist
multiples in mainland China.

Labi Akihabara: a five-story computer store in
Akihabara, Tokyo Japan.

Online retailing serve as an alternative
distribution channel for most Asian consumer
electronics retailers. The increasing popularity of
using credit cards online allows retailers to
improve sales in spite of intensifying market
competition and global economic setbacks.

37


Australasia

Durable good retailers remain the most significant
distribution channel in the Australasian CE
market. The ability to provide customers with
expert advice has made Harvey Norman one of
the region‟s most popular chains.

Photo courtesy: Harvey Norman

Dick Smith Electronics and Dick Smith
Powerhouse provide consumers with
budget electronics that are initially
launched by major manufacturers in the
Australian market.

Chains like 100% YES (Your Electronics Store),
which has 60 stores located all over New
Zealand, remain popular. Smaller family-
operated ventures are also popular among New
Zealand consumers.

FAV, a small in-car electronics shop in
New Zealand.

38



Durable good retailers continue to be
the most popular distribution channel in
the Middle East CE market. The entry
of many big retail players contributed to
the increase in the channel‟s
distribution share over the review
period. In 2008, the Landmark Group
opened the Emax Big Box store, tagged
as the largest multi-brand consumer
electronics store in the Middle East.

Emax Big Box channel store in Dubai.

South African consumers have become
more open to internet retailers and online
shopping. Clemstone, e-dreams, Croma
and i-mate are among the numerous
popular online shops that offer varied
consumer electronic products catering to all
segments of the market.

39


Scope
Global Performance
Regional Trends
Channel Analysis
Category Analysis

40

Category Analysis Consumer Electronics-Trends © Euromonitor International >

In Home-consumer Electronics: Televisions and Projectors
There was strong demand for High
TVs and Projectors
Definition televisions (HDTVs), Global Volume Performance
particularly those with LCD and plasma (2003-2008 CAGR)
flat panel displays, HD and Bluetooth
80.0
technology.
70.0 74.8

Plasma and LCD displays became the 60.0
61.4
most prevalent formats. Analogue 50.0
televisions disappeared from retail store
shelves. 40.0
39.6
30.0
The strong development of the LCD TV 20.0
panel market has resulted in massive 17.3
10.0
investments in new production facilities
-4.9 8.8
by manufacturers, increasing the 0.0
availability and driving down the costs
-10.0
and thus making the products more
attractive to consumers.

Brand-name sellers of consumer
electronics and PCs entering the LCD-TV
subsector intensified competition and
helped drive down prices.

41


In Home-consumer Electronics: VCRs and DVD Players
Global sales of VCR players dwindled while sales of VCR and DVD Players Global Volume
DVD player peaked in 2008. Performance (2003-2008 CAGR)
The growing popularity of digital broadcasting, cable
VCR and DVD Video cassette
TV services and the increased ability to download
DVD players combinations recorders
content from the internet drove global demand for
10.0
both VCRs and DVD players.
7.1
VCR/DVD combinations are disappearing from the 0.0
global market. Because of their "bridge" function 3.0
between VCR and DVD technologies, these -10.0
combinations have a slightly higher sales level than
solely VCRs, but they are also an old technology -20.0
that is simply outdated and has little role to play in
the modern digital age. -30.0
In 2008, Toshiba the primary company supporting
HD DVD, announced that it would no longer -40.0
-45.3
develop, manufacture, or market HD DVD players
and recorders. -50.0

Competition between Blu-ray DVD and HD DVD formats was intense, as the winner
would determine the direction of future new product launches. Blu-ray had backing from
Sony Pictures, Buena Vista, 20th Century Fox, Lions Gate, Warner Bros, New Line Cinema
and Studio Canal. HD was supported by Universal Studios, Paramount, MTV Films,
DreamWorks, The Weinstein Company, Image Entertainment, Magnolia Pictures,
Brentwood Home Video, Ryko, Koch Entertainment and Goldhill Entertainment.
42


In-home Consumer Electronics: TV and VCR/DVD Combo
TV and VCR/DVD combinations are disappearing TV and VCR/DVD Combo Global Volume
from the global market. Earlier launches tied VCR Performance (2003-2008)
and DVD players to analogue televisions, 10,000
contributing to declining demand. 8,908.4
8,279.6
VCRs have become outdated, compelling 7,756.7
8,000 7,408.6
manufacturers to focus on other potential high- 6,430.2
growth areas. 5,868.0

„000 units
6,000
TV combination products did not spark consumers‟
interest, especially when such new products as 4,000
HDTVs were introduced into the market.
Current demand for slim TV panels discourages 2,000
manufacturers from incorporating built-in players,
except for an HD and USB slot. 0
2003 2004 2005 2006 2007 2008
TV and VCR/DVD combinations

Leading manufacturers like Toshiba, Sharp, Westinghouse
and Sylvania launched several sophisticated digital
television and DVD combinations in the market in 2008,
following the reasoning that some households continue to
prefer these devices. In the final analysis, however, the only
way to sell this these products in significant numbers is to
Toshiba 22LV506
improve design and technology.

43


In-home Consumer Electronics: Home Audio and Cinema
Cinema and Home Speakers Value The introduction of HDTVs allows households to enjoy
Sales (2003-2008) their LCD and plasma TVs in an almost cinematic
experience. This has bolstered demand for home
120.00
cinema and speaker systems, which had sales of more
than 22.2 million units in 2008.
100.00
The rise of home cinema complements DVD players.
US$ billion

Compact home cinema and speaker systems (Home
80.00
Theatre in a Box) allows consumers to maximize their
living space and achieve total home entertainment.
60.00
Home cinema and speaker systems have become
additions to modern-day interior, and manufacturers
40.00
are increasingly incorporating fashionable and
attractive designs into their products to attract
20.00 customers.

0.00
Philips’ recently launched Ambisound
2003 2004 2005 2006 2007 2008
HTS8100 compact home cinema system does
not require five speakers to allow users to
The most important factor influencing enjoy the cinema experience, as it is
performance in the home audio and cinema
contained within a 15cm box, known as
sector has been the development of “home
cinema culture” in combination with advances
Sound Bar. Onkyo TX-SR605 is the first AV
other sectors like television and projectors and receiver to include HDMI 1.3 and to read
DVD players, all of which can be integrated into new sound formats such as DTS-HD and
home cinema systems. Dolby True HD.
44


In-home Consumer Electronics: Personal Computers
Global sales of personal computers have been
affected by increased demand for replacements, Personal Computer Volume
particularly new products with higher memory Performance 2003-2008
capacity, flat-panel monitors and a wider range of 750
hardware and software capabilities. Volume sales of
personal computers grew at a CAGR of nearly 10% 650

million units
between 2003 and 2008.
550
Gender and age became factors among consumers
shopping for personal computers. Colourful 450
computers and peripherals attracted younger 350
consumers and women, while professionals and
older consumers tended to prefer classic and more 250
compact designs. 150
Personal Computer Value Performance
50
(2003-2008)
160 2003 2004 2005 2006 2007 2008
140 Computer peripherals Desktops
US$ million

120
100
80
60 Larger LCD monitors bolstered volume sales of
40 personal computer peripherals. During the review
20 period, computer users increasingly used their PCs
0 not only to work and surf the internet but also for
2003 2004 2005 2006 2007 2008 personal movie viewing.
Desktops Computer peripherals

45


Portable Electronics: Cameras
Volume Demands of Cameras Digital single-lens reflex cameras (DSLR) were the
(2003-2008) most dynamic products in the sector. In contrast,
analogue cameras disappeared, although there is
105 still slight demand from traditional photographers.
85 Compact and lightweight cameras with higher
million units

memory capacities continue to drive digital camera
65
sales. Global volume sales of digital cameras
45 reached more than 124 million units in 2008.
25 The increased popularity of camera phones
continues to challenge camera sales, particularly at
5 the low end of the market.
2003 2004 2005 2006 2007 2008
Analogue cameras Digital cameras

There has been increasing demand for the new point-and-shoot cameras laden
with advanced technological features, such as face detection, wireless IR
technology, dust reduction, in-camera image stabilization and splash-proof
technology. Manufacturers are also ramping up the competition in terms of
megapixel sizes. Canon Power
Shot E1 was
Global Sales of Photo Printers (2003-2008) launched as a
20 more compact
millions

10 digital camera
0 than preceding
models.
2003 2004 2005 2006 2007 2008

46


Portable Electronics: Camcorders
The camcorder market has evolved from tape-based Global Volume Sales of Digital
analogue formats to DVD, hard disk drives and flash Camcorders (2003-2008)
memory. 30
DVD camcorders were popular among consumers
25
given their ease-of-use with DVD players and their

Million units
advanced videographic features and editing options. 20
Prices for DVD camcorders declined markedly
during the review period. Volume sales off 15
camcorders overall reached more than 26 million
units in 2008. 10

The capacity of flash memory cards is increasing, 5
and the format is being recognized as ideal for
storing hours of recorded video. Compared to other 0
formats, flash memory devices are more durable, 2003 2004 2005 2006 2007 2008
offer longer battery life, are typically smaller and
offer faster read and write speeds.
Integrating new technologies into digital camcorders to produce
hybrid camcorders became the latest trend in product development.
New hybrid camcorders by DXG include a five-megapixel still
camera, VGA-resolution video recorder, digital music player, voice
recorder and a video game device. Disposable camcorder pioneer
Pure Digital Technologies introduced its next-generation flash-based
video recorder that facilitates easy uploading of video to YouTube.
Hitachi introduced the world's first Blu-ray camcorder in 2007.

47

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