2013-12-25 23:44:10 - Recently published research from Business Monitor International, "Iran Consumer Electronics Report Q1 2014", is now available at Fast Market Research
Although the outlook for the Iranian consumer electronics market improved after the US lifted sanctions on handset imports in May 2013, the positive impact of the decision continues to be outweighed by economic and political challenges in the country. A further drag on sales growth comes from the government's extension of Rightel's monopoly over the 3G market until September 2014, which will limit the growth potential of 3G and sales of 3G-enabled devices. While the market is challenging for vendors, it does have many attractive underlying features, such as a large population and low penetration of PCs and smartphones, meaning significant opportunities still exist. Sanctions have resulted in some positive developments, for instance the creation of a local manufacturing sector,
which has the potential to achieve scale by servicing a population of 74mn. We believe the market lacks the technical expertise to launch products that rival major international brands and consumers have already demonstrated an ability to acquire devices from neighbouring markets, meaning demand for domestically produced devices is low.
Full Report Details at
- www.fastmr.com/prod/754560_iran_consumer_electronics_report_q1_2 ..
Headline Expenditure Projections
* Computer Sales: US$4.7bn in 2013 to US$6.3bn by 2017; CAGR of 6.8% in US dollar terms over the forecast period. Low PC penetration means significant potential, but recent currency devaluations and US sanctions have dampened the market's growth prospects.
* AV and Gaming Device Sales: US$2.2bn in 2013 to US$2.8bn in 2017; CAGR of 5.3% over the forecast period. The recent launch of digital broadcasting offers opportunities, but demand is nevertheless likely to be weakest in this segment.
* Handset Sales: US$1.8bn in 2013 to US$2.5bn in 2017; CAGR of 9.1% over the forecast period. Market growth will continue to be restricted by the slow development of 3G services by telecoms operators, but increased competition in the 3G market from 2014 poses upside risks in the long term.
Iran's score was 38.8 out of 100, the second lowest in the region, ahead of only Egypt and nearly ten points behind Oman in eighth position. Iran's score is dragged down by its Industry Risks and Country Risks scores: in both categories Iran has the lowest score in the region.
Key Trends & Developments
The US lifted sanctions on the sale of mobile phones and other communications devices, software and services in Iran on May 30 2013. The easing of sanctions was undertaken to provide Iranians with tools to help promote political freedom ahead of the country's national election. The lifting is a boost for the market, and we made a small upward revision to our forecast to account for easing of import restrictions. However, we believe there will not be a boom in the handset market for several reasons. The first is that high income urban consumers, of the sort most likely to buy high-end imported handsets, have already found ways of acquiring devices despite sanctions. Second, the 3G market continues to be held back in Iran, with the two largest operators having a combined market share of 99%, and they will continue to be restricted to EDGE and GPRS services into 2014. We therefore expect the smartphone market will only gain significant growth momentum from 2014 and into 2015. Finally, despite the easing of sanctions on communications devices, the tightening of sanctions on Iran's financial sector in early 2013 has made it more challenging for vendors to source internationally branded products directly from East Asia. Many have resorted to importing products via the Middle East and Turkey, which resulted in higher customs tariffs.
In the AV market replacement TV set purchases will be driven by the roll-out of digital TV broadcasting. Iran launched its first digital TV channel in January 2012 after developments gathered pace in 2011. Larger screen sizes and increased features will encourage consumers to upgrade their existing sets. The switch to digital TV will provide short-term impetus to market growth.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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