New Market Study Published: South Korea Consumer Electronics Report Q4 2013

We project South Korean consumer electronics spending will grow by about 5.4% in US dollar terms, from US$13.0bn in 2012, to US$13.7bn in 2013. The Korean consumer electronics market is forecast to grow in 2013, despite the mixed trading environment due to high household debt levels acting as a constraint on consumer spending. In terms of market dynamics, the maturity of the market, with high penetration rates in most device categories, means growth will be driven to a large extent by product innovation. New models of smartphones offering LTE, or the popular phablet category, are expected to fare well; while tablets, convertibles/hybrids and emerging technologies such as OLED and ultra-HD TV sets also offer medium-term growth potential.

Full Report Details at
- http://www.fastmr.com/prod/713458_south_korea_consumer_electronics_report_q4_2013.aspx?afid=301

Headline Expenditure Projections

* Computer Hardware Sales: US$4.2bn in 2012 to US$4.4bn in 2013, +6.1% in US dollar terms. A booming tablet market and indications of growing consumer demand for hybrids and ultra-thin notebooks utilising Windows 8 and Intel's Haswell chipsets will sustain growth in market value.
* AV Sales: US$2.6bn in 2012 to US$2.7bn in 2013, +2.6% in US dollar terms. TV set product innovation expected to be the most dynamic development.
* Handset Sales: US$6.2bn in 2012 to US$6.6bn in 2013, +6.1% in US dollar terms. High handset replacement and average selling price will continue to be features of the market as migrations to 4G/LTE smartphones will drive growth in 2013, despite market saturation.
* Risk/Reward Ratings: South Korea's score was 59.9 out of 100.0 and it remained in sixth place in our latest Asia CE Risk/Reward Ratings (RRR) table.

Key Trends & Developments

Despite a high penetration rate for smartphones, which BMI estimates crossed the 65% mark in Q213, the South Korean handset market remains lucrative and offers opportunities for growth. Research from H113 shows the market to have the highest replacement rate and average selling price for handsets out of the OECD markets. Further, the continued investments in LTE infrastructure by network operators are providing a case to existing smartphone owners to upgrade their handsets. While these features make the market attractive to international vendors, local vendors Samsung and LG, and to a lesser extent Pantech, continue to dominate the market. With Samsung's pioneering of the fast growing phablet category, it is unlikely there will be a significant weakening of its grip on its domestic market in the short-to-medium term.

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