BMI forecasts single-digit growth in the Czech consumer electronics market in 2012 due to continued weakness in Czech consumer spending. In 2012, household consumption continues to be battered by a combination of fiscal austerity at home and low confidence as a result of a high degree of uncertainty surrounding the future of the eurozone bloc. Christmas promotions drove stronger sales in Q412.
Smartphones were among the products in most demand, as T-Mobile reported triple-digit growth in volume sales. Trading conditions remain difficult however and consumer spending will be weighed down by fiscal austerity and still elevated unemployment, while rising inflation will continue to eat away at households' disposable income. The main consumer electronics growth drivers will be product innovation, rising incomes, lower prices and the growing popularity of feature-rich digital lifestyle products such as flatscreen digital TV sets, notebook computers and digital cameras.
Headline Expenditure Projections Computer hardware sales: US$1.9bn in 2012 to US$1.863bn in 2013, -3% in US dollar terms. Our forecast in US dollar terms in unchanged but Windows 8 should drive upgrades in 2013, with a new generation of Windows 8-based tablets and notebooks reaching the market. AV sales: US$1.6bn in 2012 to US$1.7bn in 2013, +4% in US dollar terms. BMI's forecast in US dollar terms is unchanged with vendors reporting demand for smart TV and 3D TV sets.
Handset sales: US$698mn in 2012 to US$763mn in 2013, +9% in US dollar terms. Forecast unchanged and smartphones will continue to provide a growth area.
The Czech Republic's score was 52.3 out of 100. The Czech Republic has dropped to 3rd place in the CEE region in our latest RRR table, behind Poland and Russia. The Czech Republic's ranking is boosted by its high Country Risk score (74.3).
Key Trends & Developments
- IPTV services have found a market in the Czech Republic. Sales of digital TV sets will receive a continuing boost from as Czech internet service providers roll out triple-play or quadruple play packages of fixed and mobile broadband bundled with digital television services. In August 2012, O2 launched a package costing CZK650 per month which offered new clients a television or a tablet for free with its Interna na doma Optimal service.
- Flat-screen TV sets will be the main driver of AV category sales growth over the forecast period as consumers upgrade and trade in their old models for digital ones. Analogue switch-off is being undertaken on a regional basis. The last regions to make the switchover are currently planned to be Zlin and Jihlava in June 2012, Prague made the transition to 'all digital' in May 2009.
- Smartphones are forecast to account for above 50% of handset sales in 2013 and this share is expected to pass 70% by 2017 by value as average prices fall due to competition and operator promotions. Smartphones already account for two-thirds of local mobile operator handset sales.