Handset sales to cross Dh1.5bn

Mobile phone sales in the UAE is expected to cross Dh1.5 billion mark while the subscriber penetration is forecast to cross 250 per cent by 2015, according to Business Monitor International statistics.

Mobile handset sales accounted for approximately 10 per cent of the UAE's consumer electronics spending in 2010. Following a reverse in 2010, market handset sales are expected to grow at a compound annual growth rate (CAGR) of five per cent to $414 million (Dh1.52 billion) through to 2015, when mobile subscriber penetration is forecast to reach 257 per cent, BMI said, adding that sales will be dominated by the replacement market and revenues will be driven by demand for smartphones and 3G handsets.

It said sale of electronic goods is expected to reach $3.4 billion (Dh12.5 billion) by the end of 2012 with computer hardware sales making up 53 per cent of the total.

The UAE's consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and video, audio and gaming products, is expected to increase to $4.3bn by 2015, driven by the popularity of new electronic devices such as LED and 3G TV sets, 3G mobile handsets, smartphones, feature-rich notebooks, MP3/MP4 players and Blu-ray players.

In the first of this year, UAE retailers reported a surge in demand for consumer electronic products, in many cases fuelled by price cuts.

Retailers partly attributed the rebound to recovering markets and an improvement in consumer confidence, which had been damaged by the Dubai financial crash. However, price reductions also seemed to be a significant driver.

Significant obstacles still stand in the way of a more pronounced recovery, including weak credit conditions. The shift towards more cautious domestic spending patterns is likely to persist well into 2011, with overall consumption growth remaining muted, particularly in Dubai. However, Dubai benefited most from a pick-up in the tourist trade, providing a boost to the important carry trade for electronics goods.

BMI forecasts domestic market computer hardware sales - including notebooks and accessories - of $1.8bn in 2011, up from $1.7bn in 2010. The compound annual growth rate (CAGR) for sales of computer hardware over 2011-2015 is forecast at about six per cent. Stronger demand in the notebook sector is the main driver as consumers feel the benefits of aggressive channel promotions.

AV devices accounted for about 36 per cent of consumer electronics spending in the UAE in 2010. The addressable AV device market is projected at $1.3bn in 2011. The market is expected to grow at a CAGR of six per cent between 2011 and 2015 to reach $1.6bn by the end of the forecast period. The rollout of high-definition broadcasting will drive demand for premium TV sets and Blu-ray devices. Meanwhile, following the launch of 3D TV services by triple-play service provider etisalat, vendors will target this potential growth area.

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