Domestic demand remains strong in Colombia and will continue to support growth in consumer electronics spending over the coming quarters. The burgeoning middle class and private sector credit growth will stimulate household consumption, and as incomes rise an increasing share of spending will go on consumer devices. This will allow vendors to tap into the relatively low penetration rates in key device categories such as PCs, smartphones and flat-panel TVs. Additionally, the government and telecoms operators are promoting the development of wireless and wireline data network infrastructure, which will add to demand for connected devices such as tablets, smartphones and smart TVs.
Headline Expenditure Projections
- Computer Hardware Sales: US$1.6bn in 2013 to US$1.8in 2014; +10.9% in US dollar terms. Tablets will be the outperforming device category again in 201, but with overall PC penetration still low we expect notebook sales will continue to grow.
- AV Sales: US$2.2bn in 2013 to US$2.3bn in 2014; +3.2% in US dollar terms. Flat-panel and Smart TV sets the main growth area as consumers upgrade their old models, but we expect growth to plateau with next generation OLED and 4K TVs far out of reach of mass market consumers.
- Handset Sales: US$1.3bn in 2013 to US$1.4bn in 2014; +4.8% in US dollar terms. As smartphones increase as a share of the overall handset sales mix we expect market value growth will outpace unit growth.
Key Trends And Developments
The smartphone and tablet markets are the outperforming device categories in the consumer electronics market in Colombia. The widening availability of low-and-mid range Android devices is deepening the market, driving strong unit growth as they become mass market consumer products. The boom in sales is positive for market leader Samsung, as well as emerging Android partner vendors such as Huawei and Lenovo. However, former market leaders such as Nokia, Apple and Blackberry will face a continued squeeze on volumes over the medium term.
The tablet and smartphone markets will be boosted by the government's Vive Digital programme, which offers a pledge to eliminate import tariffs on connectivity devices and to take measures to enhance credit availability for such devices. Incentives under the Vive Digital plan included a VAT exemption programme for low-income households looking to obtain an internet connection.
Meanwhile, the migration to digital TV broadcasting is currently scheduled for completion in 2019, although government sources have suggested this could be brought forward by two years. To maintain revenue growth in the face of price declines, vendors will focus on product innovation, with drivers including improved display quality and wider screens, as well as design and features, such as wireless technology.