JEDDAH: The UAE's consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and video, audio and gaming products, is estimated to reach a value of $3.4 billion in 2011, Business Monitor International's "United Arab Emirates Consumer Electronics Report Q3 2011" said Friday. This is expected to increase to $4.3 billion by 2015, driven by the popularity of new electronic devices such as LED and 3G TV sets, 3G mobile handsets, smartphones, feature-rich notebooks, MP3/MP4 players and Blu-ray players. In H111, UAE retailers reported a surge in demand for consumer electronic products, in many cases fuelled by price cuts. Retailers partly attributed the rebound to recovering markets and an improvement in consumer confidence, which had been damaged by the Dubai financial crash. However, price reductions also seemed to be a significant driver. Computer hardware accounted for 53 percent of the UAE's consumer electronics spending in 2010. BMI forecasts domestic market computer hardware sales - including notebooks and accessories - of $1.8 billion in 2011, up from $1.7 billion in 2010. The compound annual growth rate (CAGR) for sales of computer hardware over 2011-2015 is forecast at about 6 percent. Stronger demand in the notebook sector is the main driver as consumers feel the benefits of aggressive channel promotions. AV devices accounted for about 36 percent of consumer electronics spending in the UAE in 2010. The addressable Emirati AV device market is projected at $1.3 billion in 2011. The market is expected to grow at a CAGR of 6 percent between 2011 and 2015 to reach $1.6 billion by the end of the forecast period. The rollout of high-definition broadcasting will drive demand for premium TV sets and Blu-ray devices. Meanwhile, following the launch of 3D TV services by triple-play service provider Etisalat, vendors will target this potential growth area. Mobile handset sales accounted for approximately 10 percent of the UAE's consumer electronics spending in 2010. Following a reverse in 2010, market handset sales are expected to grow at a CAGR of 5 percent to $414 million through to 2015, when mobile subscriber penetration is forecast to reach 257 percent. Sales will be dominated by the replacement market and revenues will be driven by demand for smartphones and 3G handsets Rising handset replacement rates will be driven by an array of new releases. The report noted that significant obstacles still stand in the way of a more pronounced recovery, including weak credit conditions and Dubai's onerous debt repayment schedule this year. The shift towards more cautious domestic spending patterns is likely to persist well into 2011, with overall consumption growth remaining muted, particularly in Dubai. However, Dubai benefited most from a pick-up in the tourist trade, providing a boost to the important carry trade for electronics goods.
