Peru Consumer Electronics Report Q2 2012

Peru’s consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and AV products, is projected to be worth around US$2.3bn in 2012. Consumer spending on flat-screen TV sets, handsets, and other devices was on an upwards trajectory in 2011 and is expected to grow at a 8.2% CAGR over BMI’s five-year forecast period. Although we expect strong growth in Peru for 2011 and 2012, we also see risks to our growth outlook stemming from the uncertainty surrounding the economic situation beyond 2012.

BMI believes that the Peruvian consumer electronics market has robust growth potential, particularly following the long-awaited ratification of the US-Peru Free Trade Agreement (FTA) in December 2011. The implementation of digital TV broadcasting will drive demand for flat-screen TV sets, while expansion in rural areas should boost the mobile handset segment. We expect spending on electronic lifestyle products such as flat-screen TV sets and smartphones to continue to rise over the coming years as wealth levels rise and the availability of credit improves across Peru.

Computers
Computer hardware accounted for about 36% of Peru’s consumer electronics spending in 2011, with PC penetration still below 30%. BMI forecasts Peru’s computer hardware sales (including notebooks and accessories) to reachUS$1.1mn in 2016. The PC has been boosted by a fresh wave of corporate upgrades and continued strong netbook sales. One significant recent market driver was netbooks distributed by the OLPC programme.  Computer hardware CAGR for the 2012-2016 period is forecast at about 8.8%, driven by sales of notebooks.

AV Devices
AV devices accounted for around 40% of Peru’s consumer electronics spending in 2011.  Peru’s domestic AV device market is projected at US$912mn in 2012. Sales of digital TV sets and digital cameras are projected to drive AV spending growth at a projected CAGR of 6.5% between 2012 and 2016, as Peru prepares to transfer to digital broadcasting based on  Brazil's SBTVD standard.

Mobile Handsets
Mobile handset sales accounted for around 24% of Peru’s consumer electronics spending in 2011. Peru’s market handset sales are expected to grow at a CAGR of 10.1% to US$784mn in 2016, as mobile subscriber penetration passes 100%. The introduction of a new operator should create further growth prospects for the market. Sales will be dominated by the low-tier segment, but there will be increasing demand for smartphones as prices continue to fall.