BMI View: BMI continues to remain optimistic towards Mexico's long-term growth outlook , as a result of its booming manufac tur ing sector combined with a stronger private consumer. This should filter down to the consumer electronics sector, and we forecast spending to rise from USD13.8bn in 2013 to USD14.9bn in 2014.
Mexico is a manufacturing hub because of its proximity to the US, low overall costs (which are believed to be lower than the likes of China) and high quality labour. Consumer electronics and IT companies are increasingly looking to establish their own manufacturing centres in Mexico, which results in more affordable products available for the local market.
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 for smartphones.
Headline Expenditure Projections
Computer hardware sales: USD7.5bn in 2013 to USD8.1bn in 2014. Should be boosted by growing popularity of by tablets and further migrations to Windows 8.
AV s ales: USD2.2bn in 2013 to USD2.3bn in 2014. TV sets expected to provide the most dynamic development.
Handset s ales: USD4.2bn in 2013 to USD4.5bn in 2014. 3G and 4G smartphones are likely to be the main revenue growth driver.
Key Trends And Developments
A significant growth opportunity exists in provincial areas and second-tier cities, where multinational vendors are trying to strengthen distribution. The under-penetrated south east is expected to offer growth opportunities, particularly in the public sector.
Digital TV sets will account for most TV sales by 2018, 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 and the analogue switch-off, scheduled for completion in December 2015. Government plans to introduce...