We expect difficult trading conditions to persist in many segments of Bulgaria's consumer electronics market in 2013. Retail sales remained in negative territory for much of 2012; however, we expect fiscal policy to be broadly supportive of household consumption ahead of planned elections in 2013.
Declining house prices, which create a negative wealth effect and extremely low consumer confidence, are set to keep household spending subdued in the coming months. However, growing affordability will drive consumer electronics purchases, with prices of key products such as notebooks and flat-panel TV sets dropping considerably. Growth areas will include smartphones, TV sets and tablets, with Bulgaria's migration to digital broadcast helping to boost sales in the AV segment.
Headline Expenditure Projections
Computer Sales: US$697mn in 2012 to US$728mn in 2013, +4% in US dollar terms. Forecast in US dollar terms unchanged but tablet sales and upgrades to Windows 8 devices will create growth areas.
AV Sales: US$363mn in 2012 to US$387mn in 2013, +7% in US dollar terms. Forecast in US dollar terms upwardly revised, with TV sets expected to provide the most dynamic development.
Handset Sales: US$264mn in 2012 to US$290mn in 2013, +10% in US dollar terms. Forecast in US dollar terms unchanged, with smartphones the main revenue growth driver.
Risk/Reward Rating: Bulgaria's score is 40.8 out of 100.0. BMI expects rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets and the country is in a favourable position to continue to improve its current sixth place ranking over time.
Key Trends & Developments
- BMI expects PC sales in 2013 to report an improvement on 2012, with Windows 8-based devices helping to encourage upgrades. Moreover, there should be a consolidation of prices, as vendors promote higherend models. Tablets enjoyed rapid growth in the Bulgarian market, with a 50-fold increase in sales of the devices at the Multirama chain of consumer electronics retail stores. BMI expects tablets to comprise above 40% of notebook sales by 2017.
- Bulgaria's transition towards digital TV will reach an important milestone on September 1 2013 when the country is due to switch off analogue broadcasting, and this should provide a boost to the AV market. The main AV growth area will be digital products such as flat-panel TV sets, which have become increasingly popular with consumers. As overall TV set sales have fallen, vendors and retailers have looked to product innovation to support revenue, with the introduction of LED-backlit TV sets, 3D TV and smart TV sets.
- Smartphones' share of revenue is projected to equal that of feature phones by 2013, and to reach 70% by the end of the forecast period. The share of subscribers to Bulgarian mobile operator Vivacom's network that use smartphones has passed 50%.