Colombia Consumer Electronics Report Q3 2010

Colombia’s consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and video, audio and gaming products, is estimated at US$3.5bn in 2010. Despite current economic headwinds, the market is expected to grow at a compound annual growth rate (CAGR) of 9.1% to US$5.0bn by 2014. In 2009, consumer goods imports dropped substantially from 2008 levels and were down 13.0% year-on-year (y-o-y) by September 2009.

Colombia’s economy seems to have survived the downturn in better shape than we had initially feared, but Colombian consumers are likely to remain under pressure in 2010. With unemployment hitting a sixyear high of 14.6% in January, it is hard to believe that banks will be keen to return to the days of easy credit anytime soon. However, continued – if slower – growth in spending should see per capita consumer electronics spend reach US$97 by 2014. Drivers will include rising PC and mobile phone penetration, the launch of digital TV broadcasting and 3G mobile network roll-outs.

Computers
Computer hardware accounted for around 32% of Colombia’s consumer electronics spending in 2009, with PC penetration reaching at 12.8% as of July 2009. We forecast Colombia’s domestic market computer hardware sales (including notebooks and accessories) to around US$1.1bn in 2010. Computer hardware CAGR for the 2010-2014 period is forecast at about 9.8%, driven by sales of notebooks and netbooks.

AV Devices
AV devices accounted for around 50% of Colombia’s consumer electronics spending in 2009. Colombia’s domestic AV devices market is projected at US$1.7bn in 2010. Sales of digital TV sets and digital cameras are projected to drive AV spending growth at a projected CAGR of 9.2% between 2010 and 2014. In 2009, the Colombian broadcasting regulatory authority CNTV set a digital TV broadcasting coverage target of 42% of the population by the end of the year.

Mobile Handsets
Mobile handset sales accounted for around 17% of Colombia’s consumer electronics spending in 2009. Colombia’s market handset sales are expected to grow at a CAGR of 10% to US$929mn in 2014, as mobile subscriber penetration reaches 88%. Sales will be dominated by the low-tier segment, but there will be increasing demand for features such as MP3 players and cameras.