Consumer durables is a cataloguing of consumer goods that are not essential to be bought very often as they are fashioned in a way so as to last for an extended period of time. Profits in the consumer durables sector were most profoundly…
BMI View: The forecast for 2016 was downgraded in the Q4 update as PC sales decreased faster than
expected, with tablet sales particularly hard hit by competition from phablets. Even though US dollar
spending will again contract, the hit will be much smaller than in 2015, when rapid ringgit depreciation
and the new Goods and Sales Tax hurt spending levels. Throughout the medium term, we expect device
spending to recover, based on ringgit appreciation from 2017 that will increase purchasing
power. Meanwhile, product trends should also become more supportive. We forecast total device spending
will increase at a CAGR of 5.3% throughout the 2016-2020 period.
Latest Updates And Industry Developments
? Computer Hardware Sales: USD1.9bn in 2016 to USD2.3bn in 2020, a compound annual growth rate
(CAGR) of 4.9%. Outlook downgraded in Q4 update as tablet demand cannibalisation by smartphones
escalated with a further decline in PC sales in H116 reported by local retailers.
? AV Sales: USD763mn in 2016 to USD930mn in 2020, a CAGR of 5.1%. AV outlook is improving as the
ringgit appreciates and smart/Ultra-HD TV sets trigger upgrades, which will enable a modest recovery
following the double-digit rate of declines in 2014 and 2015.
? Handset Sales: USD2.6bn in 2016 to USD3.2bn in 2020, CAGR of 5.7%. Boost from ringgit
appreciation and income growth trends will be offset as the smartphone boom runs out of steam in an
increasingly saturated market.