In 2013 BMI forecasts that Australian demand for consumer electronics will grow by around 3%, as weaker economic growth is forecast to hit the market over the short-to-medium term. We expect private consumption growth to slow from an estimated 2% in 2012 to 1.2% in 2013. Leading electronics retailer JB Hi-FI reported that conditions remained deflationary in early 2012, and average flat-screen TV set prices have fallen, in part due to an influx of low-cost Chinese brands. Meanwhile, another consumer electronics retail brand, Dick Smith, is to close 100 stores over a two-year period. Longer-term consumer electronics market drivers include rising incomes, technology innovation such as 4G LTE mobile networks and 3D TV, product innovation such as OLED and Ultra-HD TV sets, and government ICT programmes. Smart and ultra-large 3D TV sets, Windows 8 smartphones, ultrabooks and tablets are expected to be consumer electronics growth areas in 2013, while iPhones and Windows Phone 8s are increasingly popular with larger organisations.
Headline Expenditure Projections
Computer hardware sales: US$9.5bn in 2012 to US$9.6bn in 2013; 1% growth in US dollar terms. Forecast in US dollar terms flat, but lower-cost ultrabooks and Windows 8 upgrades should help to shore up demand.
AV sales: US$1.9bn in 2012 to US$2.0bn in 2013; +3% in US dollar terms. Forecast in US dollar terms unchanged, with aggressive promotions and Chinese imports expected to result in continued price pressure.
Handset sales: US$5.2bn in 2012 to US$5.5bn in 2013; +7% in US dollar terms. Forecast in US dollar terms unchanged, with strong growth in the smartphone market.
Risk/Reward Rating
Australia's score is 72 out of 100.0, which puts it at first place in our latest Asia Consumer Electronics Risk/Reward Ratings (RRR) table. The country's high country reward and country risk scores means it is ranked higher than Asian giants such as China and India. BMI expects Australia to continue to be one of the region's most important markets and at the cutting edge of trends like 4G mobile and 3D-TV.
Key Trends And Developments
- An Australian parliamentary committee is investigating claims by consumer groups that prices of consumer electronics products are considerably higher in Australia than in many comparable markets. A public hearing before the House Committee will take place on March 22. Prior to this, in October 2012 a public hearing was chaired by Labour MP Nick Champion, who said the hearing had received 81 submissions, indicating a high level of interest in the inquiry. IT companies have rejected the claims and argued that higher Australian prices are not unique to the IT industry.
- We expect the popularity of tablets to continue in 2013, with shipments reaching around two million units. By the end of 2012, it was forecast that as many as 40% of Australians could be using a tablet PC, with penetration at about 20%.
- A range of smaller and lower-cost Ultra-HD (UHD) TV sets are expected to reach the Australian market in 2013, boosting demand in this emerging product category. In March 2013, LG planned to launch a 55- inch UHD set at a price point of around AUD$10,000. However, Chinese vendors such as Changhong, TCL and Hisense are likely to be the source of lower-priced models, with all three expected to launch 55- to 65-inch screen UHD models in Australia in 2013, with prices set to be as low as AUD$6,000.