Just Released: "Mexico Consumer Electronics Report Q4 2013"

BMI projects Mexican consumer electronics spending will grow by about 7% in US dollar terms in 2013, to US$13.7bn. In 2013, despite a mixed economic outlook, Mexican consumers are expected to continue to spend on flat-panel TV sets, tablet PCs and smartphones. A new government reform bill introduced in March 2013 would, if implemented, provide a stimulus to demand by opening up Mexico's broadcasting and telecoms sectors to more competition. While we remain optimistic toward Mexico's growth story over the medium term, Mexican private consumption weakened in H212 due to a weaker manufacturing sector and high inflation and we expect this trend will persist in 2013. The US economy is sluggish and credit growth is expected to tighten. However, we expect continued demand for flat-screen TV sets, tablets, notebooks and smartphones to be driven by product innovation, such as smart TV sets and growing affordability, particularly smartphones.

Full Report Details at
- http://www.fastmr.com/prod/673243_mexico_consumer_electronics_report_q4_2013.aspx?afid=303

Headline Expenditure Projections

* Computer hardware sales: US$7.1bn in 2012 to US$7.4bn in 2013,. Forecast in US dollar terms unchanged by tablet sales and migrations to Windows 8 and should provide a boost in 2013.
* AV Sales: US$2.0bn in 2012 to US$2.2bn in 2013. Forecast in US dollar terms unchanged, with TV sets expected to provide the most dynamic development.
* Handset Sales: US$3.8bn in 2012 to US$4.1bn in 2013. Forecast in US dollar terms unchanged, with smartphones the main revenue growth driver.

Key Trends & Developments

A significant growth opportunity exists in provincial areas and second-tier cities, where multinational vendors are now trying to strengthen distribution. Mexico's under-penetrated south-east region is expected to offer growth opportunities over BMI's five-year forecast period to 2017, particularly in the public sector.

Digital TV sets will account for of the majority of sales by 2017 and TV revenue will account for a similarly high portion of total AV demand. Mexico has one of the region's highest TV household penetration rates, but continued growth should be driven by increased demand for multiple set ownership. Government plans to introduce more competition in the broadcasting sector and to license more digital TV services should drive TV set upgrades.

Operator promotions have played an important role in driving the high-end phone market. Smartphone/PDA sales are expected to grow to US$4.1bn by 2017, with smartphones accounting for more than half of unit sales. Operators reported that demand for smartphones is high and value-added services are driving revenue upwards.

The 4G mobile phone sector is becoming increasingly competitive, with the launch of the BlackBerry Z10 in March 2013 and the BlackBerry Q10 in July 2013. Both models will offer stiff competition to Apple's iPhone 5 and to the Samsung Galaxy S3 and S4 (the latter having been launched in May 2013).

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