BMI View: Poland's consumer electronics market is expected to have increased in value by 6.1% in 2013 as vendors targeted the first time buyer and upgrade/replacement markets. There is, however, risk to the downside following a sharp dip in household consumption in 9M13. Despite this weakness we expect consumer electronics spending to continue to grow and outperform the overall retail sector during our fiveyear forecast period to 2017. We forecast steady increases in spending on consumer electronics products such as smartphones, tablets and flat-panel TV sets, driven by new technologies, consumers seeking choice and low prices offered by foreign and domestic chains.
Headline Expenditure Projections
- Computer hardware sales: US$3.7bn in 2012 to US$3.8bn in 2013, +3.5% in US dollar terms. Unit growth is strong, but with consumers increasingly opting for low-cost sub-PLN600 tablets value growth is more subdued.
- Handset sales: US$2.0bn in 2012 to US$2.1bn in 2013, +8.8% in US dollar terms. Forecast in US dollar terms unchanged, with strong growth expected in smartphone sales as penetration remains relatively low in mid-2013.
- AV sales: US$2.4bn in 2012 to US$2.6bn in 2013, +8% in US dollar terms. Forecast in US dollar terms unchanged, with growth areas including HD TV, 3D and smart TV.
Poland's score rose to 53.4 out of 100.0, putting it in second position, only just behind the regional giant, Russia, but ahead of the relatively wealthier Czech Republic and Turkey. Poland scores highly and looks set to be one of the best regional market prospects over our five-year forecast period to 2017.
Key Trends & Developments
The influx of low cost tablets running Google's Android OS from OEMs saw sales boom in H212, a trend that accelerated in 2013. Sales of sub-PLN600 devices took just 13% of sales in Q112 when Apple's iPad dominated, but this share had exceeded 50% by the end of 2012. This has deepened the tablet market and pushed adoption rates far higher than when the market was dominated by Apple's iPad, which was out of the price range of the majority of Polish consumers. The gains for tablet vendors have, however, hit notebook sales hard, with IT distributor Action reporting a 27% y-o-y decline in PC shipments to Q213 - a steeper drop than even that experienced in Western Europe. BMI believes this trend will continue, with Chinese producers benefiting, as sales of cheap devices are supported by major retailers such as Biedronka and Carrefour.
The smartphone market is another rapidly evolving segment of the consumer electronics market. Penetration rates remain significantly lower than those in Western European markets. However, with growing competition and operator promotions contributing to price erosion, BMI expects adoption of smartphones will increase rapidly in 2013 and 2014. One interesting feature of the Polish smartphone market is the popularity of Windows Phone handsets, where they reportedly enjoy a double-digit share of sales in the smartphone market. This is a success story, but we highlight the threat posed by competition from Android handsets, which have proved popular across Central and Eastern Europe, dominating the low end of the market.