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BMI View: Oman's consumer electronics market has a weak outlook over the medium term as a result of
approaching saturation in key device categories, especially smartphones, against a backdrop of economic
uncertainty due to oil prices and the depletion of demographics as a growth driver. The market should
continue to be lucrative in per capita terms on the basis of replacement spending, but we caution that the
broad economic and demographic support that drove growth in the past five years will soften considerably
over the forecast period. There is also downside should oil prices take another move lower and result in a
forced rial devaluation, which we believe means Oman is the GCC market most vulnerable to oil market
trends. Our core scenario is however for gradual economic recovery, and we expect this to underpin a
device spending CAGR of 2.6% over 2016-2020.
Latest Updates And Industry Developments
? Computer Hardware Sales: USD266mn in 2016 to USD280mn in 2020, at a compound annual growth
rate (CAGR) of 1.2%. Outlook lowered in Q416 as a result of cannibalisation of tablet spending by
smartphones, but still growth potential in hybrid notebooks and all-in-one desktops.
? AV Sales: USD174mn in 2016 to USD189mn in 2020, at a CAGR of 2.0%. Flat-panel saturation and
digital camera cannibalisation resulted in four consecutive annual declines in spending, but we envisage a
modest return to growth as smart and Ultra HD sets trigger high-value upgrades.
? Handset Sales: USD673mn in 2016 to USD764mn in 2020, at a CAGR of 3.2%. Approaching
smartphone saturation means the boom is over in Oman, and there is downside to prices if the economy is
weaker than expected.