There are no significant changes to BMI's views relating to Turkey's consumer electronics market as the latest data from retailers and the principal local and international manufacturers suggest our growth estimates and forecasts are on track. As we have noted before, moderating consumer loan growth is repositioning the economy from debt-fuelled consumption to a more balanced scenario, which is lightening the burden on consumer spending.
Consumer electronics sales remain strong in key categories, such as smartphones. Turkcell reported strong growth in revenues in 2012, driven by an increased number of smartphone users on its network. Vodafone and AVEA also reported surges in smartphone numbers. The government's FATIH programme to provide tablets for school students is expected to have a major impact on the market and local and international vendors have become involved.
Despite an expected short-term moderation therefore, Turkey's consumer electronics market is well positioned to outperform most other emerging Europe markets. Demand is expected to increase at 8.4% CAGR through to 2017, driven by the growing popularity of digital lifestyle devices such as flat-panel TV sets, smartphones, notebook computers and digital cameras, as well as rising incomes and lower prices.
Headline Expenditure Projections
Computer Hardware Sales: US$5.7bn in 2012 to US$6.3bn in 2013, +10% in US dollar terms. Forecast in US dollar terms unchanged, but upgrades to Windows 8 based machines could provide a boost despite a relatively tepid response to the new OS.
AV Sales: US$1.9bn in 2012 to US$2.1bn in 2013, +7% in US dollar terms. Forecast in US dollar terms unchanged, with digital broadcasting penetration reaching 70% in 2012.
Handset Sales: US$1.8bn in 2012 to US$2.1bn in 2013, +14% in US dollar terms. Forecast in US dollar terms unchanged, with smartphones accounting for about 60% of Turkish handset revenues in 2013.
Risks/Rewards Rating: Turkey's score was 50.9 out of 100. BMI expects consumer IT spending to hold up relatively well, although continued price erosion in the PC and handset market will place pressure on margins. Turkey is in fourth place (out of eight) in our latest RRR table and the country is in a favourable position to continue to be a regional market outperformer.
Key Trends & Developments
- Mobile subscriber penetration reached 91% in 2012. Sales will be driven increasingly by the replacement market. With smartphone prices declining, and a larger portfolio of devices and mobile internet services available, smartphones passed 60% of handset sales by Turkish mobile operator Turkcell in 2012.
- Turkey's evolution towards digital TV services will help drive AV sales, with video devices such as TV sets, digital cameras and VCR players accounting for more than 80% of demand. A higher proportion of sales were accounted for by digital models. Total stock of flat-panel TV sets among Turkey's TV households is more than 2.5mn units.
- The FATIH technology for schools programme will boost PC sales over the next few years. Its goal is to provide 15mn students with tablet PCs, as well as other devices such as digital cameras. The project is expected to cost up to US$7.5mn and should reach 570,000 classrooms over the next five years. The focus of the project is networked computers, printers and cameras for every classroom, as well as educational content.