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BMI View: India is a leading global opportunity for medium-term consumer electronics spending growth.
Low penetration rates, even compared to other emerging markets, mean there is potential to sell to firsttime
buyer households, as well as replacement devices to the middle class. We expect this potential to be
unlocked over the medium term by a positive transformation of India's household income profile, with the
number of USD5,000-plus annual income households expected to increase by over 72mn during the
2016-2020 period. Another positive is the increase in local assembly of handsets and tablets, with further
upside if this extends to manufacture of components, and if the government broadens the incentive packages
of the 'Make In India' initiative to other device categories.
Latest Updates And Industry Developments
- Computer Hardware Sales: USD17.8bn in 2016 to USD23.6bn in 2020, a compound annual growth
rate (CAGR) of 6.3%. Rising incomes are the foundation for a robust medium-term outlook, with further
upside if computer production hardware incentives are extended under the 'Make In India' initiative.
- AV Sales: USD15.2bn in 2016 to USD20.0bn in 2020, a CAGR of 6.3%. Large LCD/LED upgrade
opportunity remains, in contrast to most of emerging APAC, but there will be a slight drag from digital
camera volume cannibalisation as smartphone ownership widens.
- Handset Sales: USD18.1bn in 2016 to USD24.4bn in 2020, a CAGR of 9.0%. Smartphone market will
maintain robust volume growth over the medium term and drive handset segment outperformance, but we
caution overcapacity could ultimately put pressure on margins.