BMI View: Rising incomes and declining device prices in key categories have catalysed storng growth in the Malaysian consumer electronics market. 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. We expect this trend will remain in place over the medium term, 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: USD2.5bn in 2013 to USD2.6bn in 2014, growth of 3.9%. Tablet sales are driving unit growth, but with preference for low-cost devices, growth in market value is failing to keep pace with volume increases.
AV Sales: USD1.2bn in 2013 to USD1.3bn in 2014, growth of 7.9%. There will be a boost to TV sales ahead of the FIFA World Cup, but with digital camera and mp3 player demand being squeezed by rising penetration of multifunctional smartphones.
Communications Sales: USD2.9bn in 2013 to USD3.3bn in 2014, growth of 9.1%. Smartphone penetration is rising rapidly as device prices decline, making handsets the outperforming segment of the market. The launch of 4G mobile services will act as a push factor for upgrades at the high end of the market, ensuring continued growth.
Key Trends And Developments
Smartphone penetration rose 13pps in 2013 to reach 37% at the end of the year - and BMI forecasts this trend will continue with an increase of 10pps in 2014. The increased share of smartphones in the device sales mix has boosted handset market value, making it the outperforming segment of the consumer electronics market 2011-2014. Affordable Android-based devices have...