BMI View: Sales of key digital lifestyle products such as digital TV sets, smartphones and tablets are growing rapidly in Malaysia, and the country remains one of the region's high-growth consumer electronics markets.
Ongoing growth in private consumption, largely credited to the impact of cash handouts and increased government welfare spending, will support market expansion. The falling price of devices will be a further growth driver, particularly with increasing competition in the smartphone, tablet and flat-screen TV markets from Chinese vendors. However, there is downside risk due to uncertainties over the export market, while the outlook for employment could weigh on consumer confidence and limit spending on discretionary lifestyle products such as TV sets.
Headline Expenditure Projections
Computer Hardware Sales: US$3.0bn in 2013 to US$3.2bn in 2014. Tablet sales are driving unit growth, but with preference for low-cost devices, growth in market value is failing to keep pace.
AV Sales: US$1.8bn in 2013 to US$1.9bn in 2014. HD, smart TV sets and digital cameras provide strong growth areas, but AV will remain the slowest growth segment of the consumer electronics market.
Communications Sales: US$3.5bn in 2013 to US$3.8bn in 2014. Smartphone penetration is rising rapidly as device prices decline, and the launch of 4G mobile services will act as a push factor for upgrades at the high end of the market.
Key Trends And Developments
The PC market is in the midst of a major transition, with declining sales of traditional PC form factors (desktops and notebooks) as consumers shift their attention to tablets. Falling prices in the tablet market will drive growth in sales, while Malaysia's improved wireless broadband infrastructure, offering an increased number of hotspots, will also boost sales. However, the desktop and notebook market is not declining as steeply as in more developed markets, with the lower PC penetration meaning there is still demand for...