Market Report, "Hong Kong Consumer Electronics Report Q4 2013", published

From: Fast Market Research, Inc.
Published: Wed Oct 23 2013

Spending growth on consumer electronics devices in Hong Kong has slowed in 2012 and 2013 due to a combination of a weaker economic environment, price erosion and high penetration of devices in key markets. However, spending growth has remained in positive territory and we forecast total spending will increase 5.7% in US dollar terms in 2013 to reach US$4.45bn. Key product categories driving spending growth include HD TV sets, tablets, and 4G smartphones, with potential for hybrids and Ultrabooks to contribute to growth over the medium term. There is, however, downside risk to this scenario from the negative wealth effect of any cooling in property prices that would hit consumer confidence.

Headline Expenditure Projections

Computer hardware sales: US$2.46bn in 2012 to US$2.61bn in 2013, up 5.9%. We have revised our forecast downwards to account for the greater share of unit sales going towards low priced tablets, most commonly substituted for notebook purchases.

Full Report Details at

AV sales: US$1.44bn in 2012 to US$1.5bn in 2013, up 4%, with TV sets expected to provide the most dynamic development.

Handset sales: US$554mn in 2012 to US$605mn in 2013, up 9.2% as upgrades and replacement of smartphones the key sales growth driver.

Key Trends & Developments

* Smartphones have been the most important sub-segment of the handset market for several years, with penetration rising from 35.1% in 2011 to 62.8% in 2013. BMI expects sales of smartphones to continue to outpace growth of the overall handset market over our five-year forecast period. Sales will be driven by upgrades as well as replacements for existing smartphone users who have grown accustomed to short replacement cycles for their handsets. Although the market is healthy overall, vendors will be subject to price pressures that will likely narrow margins as Apple launches its cheaper plastic iPhone 5C and competition from mainland China vendors such as Xiaomi, Lenovo and Huawei intensifies.
* Hong Kong was found to have the highest penetration of tablet ownership among daily internet users in 2013 at 55%, according to research by Ericsson Consumerlabs. However, there is still growth potential in the market from both first time buyers and upgrades/replacements. Meanwhile, Hong Kong retailers are optimistic that product releases such as lower-priced ultrabooks and Windows 8 hybrid/convertible devices will keep sales of mobile computers at a high level in 2013.
* A combination of new technologies such as 3D, Ultra-HD, OLED and internet-enabled TV, and more competitive pricing, should help to support AV demand. To maintain or increase sales volumes, vendors will focus on product innovation, with drivers including improved display quality and wider screens, as well as design and features such as wireless technology.

About Fast Market Research

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