BMI View: We forecast a second successive year of decline in German consumer electronics spending in
2016, but still a significant improvement over market conditions in 2015. US dollar appreciation hit
consumer electronics spending through higher local currency prices in Germany in 2015, which
exacerbated negative technology trends, but both the euro-USD exchange rate and technology trends are
less hostile in 2016 and will contribute to improved performance even with the downside introduced as a
result of Brexit. The medium-term outlook is buoyed by our forecast for euro appreciation from 2017, but
volume growth potential is limited due to the maturity of the German market where vendors will be reliant
on replacement spending.
Latest Updates And Industry Developments
? Computer Hardware Sales: USD23.8bn in 2016 to USD28.2bn in 2020. Euro appreciation has upside
potential for PC replacement spending over the medium term, particularly hybrid notebooks, but
increasingly powerful smartphones could cannibalise some of these sales.
? AV And Gaming Sales: USD10.4bn in 2016 to USD11.3bn in 2020. Demand will continue to fluctuate
with major sports events that concentrate TV set upgrades, but with the digital camera market still in
decline we expect AV will be the underperforming segment over the medium term.
? Mobile Handset Sales: USD12.1bn in 2016 to USD12.6bn in 2020. A saturated smartphone market
means much slower growth versus the period up to 2014 when large number of first-time smartphone
buyers was the primary engine of growth.