The UAE's consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and video, audio and gaming products, is estimated to reach a value of US$3.8bn in 2012. This is expected to increase to US$4.7bn by 2016, driven by the popularity of new electronic devices such as LED and 3G TV sets, 3G mobile handsets, smartphones, feature-rich notebooks, MP3/MP4 players and Blu-ray players.

In H111, UAE retailers reported a surge in demand for consumer electronic products, in many cases fuelled by price cuts. Retailers partly attributed the rebound to recovering markets and an improvement in consumer confidence, which had been damaged by the Dubai financial crash. However, price reductions also seemed to be a significant driver.

Significant obstacles still stand in the way of a more pronounced recovery, including weak credit conditions and Dubai's onerous debt repayment schedule in 2011. The shift towards more cautious domestic spending patterns is likely to persist well into 2012, with overall consumption growth remaining muted, particularly in Dubai. However, Dubai benefited most from a pick-up in the tourist trade, providing a boost to the important carry trade for electronics goods.

Computers

Computer hardware accounted for 53% of the UAE's consumer electronics spending in 2011. BMI forecasts domestic market computer hardware sales - including notebooks and accessories - of US$2.0bn in 2012, up from US$1.9bn in 2011. The compound annual growth rate (CAGR) for sales of computer hardware over 2012-2016 is forecast at about 6%. Stronger demand in the notebook sector is the main driver as consumers feel the benefits of aggressive channel promotions.

AV

AV devices accounted for about 35% of consumer electronics spending in the UAE in 2010. The addressable UAE AV device market is projected at US$1.3bn in 2012. The market is expected to grow at a CAGR of 5% between 2012 and 2016 to reach US$1.6bn by the end of the forecast period. The rollout of high-definition broadcasting will drive demand for premium TV sets and Blu-ray devices. Meanwhile, following the launch of 3D TV services by triple-play service provider Etisalat, vendors will target this potential growth area. During 2011, vendors and service providers cooperated on the launch of 3D TV services.

Mobile Handsets

Mobile handset sales accounted for approximately 11% of the UAE's consumer electronics spending in 2011. Following a reverse in 2010, market handset sales are expected to grow at a CAGR of 6% to US$559mn through to 2016, when mobile subscriber penetration is forecast to reach 233%. Sales will be dominated by the replacement market and revenues will be driven by demand for smartphones and 3G handsets. Rising handset replacement rates will be driven by an array of new releases.

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