Local Business

Consumer electronics market to stay strong

Staff Report
Filed on October 24, 2013

UAE computer hardware sales to grow at 7% this year

The market for consumer electronics is likely to remain strong in the wake of lifestyle changes region-wide, according to a study.

Dubai Chamber of Commerce and Industry, which released the study on the sidelines of GitexTechnology Week, said that the prospects for the sector are likely to improve as the regional economies forecast a reasonable growth ratio as prevailing trends of converging technologies, growing population and incomes underpin the growth-dynamic for the foreseeable future.

“The role of Dubai in these growth dynamics further underlines the importance of major regional events like Gitex, it says.

The chamber study, which is based on a Business Monitor International (BMI) report, anticipates UAE computer hardware sales including PCs, notebooks and accessories to grow at seven per cent between 2012 and 2013 despite early reports that PC sales have been tapering off.

Meanwhile, Dubai’s trade in consumer electronics has grown from an estimated Dh24 billion in 2002, to Dh130 billion in 2011 while last year the emirate exported consumer electronics valued at approximately Dh55 billion which came from imports of Dh74 billion.

The figures, which are based on latest Dubai Customs statistics, clearly indicate the growth witnessed by the off-stream sectors like consumer electronics unlike the conventional industries like tourism, hospitality, and retail, which goes on to emphasises the emirate’s role as information and communications technologies trade hub in the region.

According to the study, Dubai’s exports are mostly destined to regional countries like Saudi Arabia, Iraq and Kuwait which are the top three trade partners representing Dh24 billion (over 50 per cent) of consumer electronics exports thus showing strong growth in recent years.

For example, consumer electronics exports to Saudi Arabia have increased at an average of 36 per cent a year since 2008 while exports to other GCC countries have also seen rises of at least 26 per cent year-on-year and included Kuwait, while Qatar has shown a rise of up to 36 per cent year-on-year in 2011 compared to the year 2010. Still, Saudi Arabia dominated the export market which accounted for 26 per cent of Dubai’s consumer electronics exports followed by Iraq (18 per cent) and Kuwait (5.4 per cent) in 2011.

Dubai’s imports typically originate from China which is a leading supplier of hardware including computers and handsets.

Consumer electronics imports from China to Dubai were valued at approximately Dh34 billion in 2011 while video games supplies from the US and Japan are strong still they are not enough to impact the overall position of China as the importer of choice for the consumer electronics category.

Over the last five years up to 2011, the study informs that each sub-category of consumer electronic has experienced strong volume growth of at least 14 per cent, and in some cases up to 26 per cent and despite the rise of smart-phones, the overall contribution of handset devices to consumer electronics imports remains stable at around 50 per cent.

Anecdotal evidence, however, suggests that smart phone adoption is on the rise and consumers are likely to be funnelling more income into handsets than other devices. This is probably due to the diverse income classes to which handsets are sold as all buyers are not likely to have fourth generation networks in their respective countries.

According to the BMI report, computer sales in the UAE were Dh6 billion in 2012 and are expected to reach Dh6.1 billion this year. Audio Visual and Gaming sales were Dh4.9 billion in 2011 compared to a forecast of Dh4.9 billion in 2012 compared to a forecast of Dh5.1 billion this year.

Sales of new flat-screen TVs are cited to be the main driver of growth for this category. Handset sales, meanwhile, are anticipated to increase the most, from Dh1.7 billion in 2012 to Dh1.9 billion in 2013 — an increase of approximately 10 per cent over the year.

According to BMI, around one-third of the emirates’ computer users still use PCs based on Windows XP. In 2013, there has been a trend of upgrading hardware to support software. Traditional desktop and laptop computers, however, are seeing a migration to new operating systems such as Windows 8.

The steady growth of fixed and mobile broadband penetration will also be a significant driver of demand for handsets as connectivity devices. BMI forecasts the UAE handset market to reach 3.8 million units in 2013

— business@khaleejtimes.com

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