28/09/2017 05:34 AST

The consumer electronics industry in the UAE is expected to fall by 0.23 per cent to Dh11.95 billion, compared to Dh11.97 billion last year, an industry expert told Gulf News.

Ahmad Bakr, research analyst at Euromonitor International Middle East, said that despite the decrease, sales are still better than last year. Revenues are down due to decreases in average selling price.

“Volume is expected to register a 1.8 per cent growth but it is lower than last year. Volume for this year is expected to be 12.65 million compared to 12.4 million units last year. The reason is due to the overall slowdown in consumer electronics market. Small appliances are witnessing a negative growth,” he said.

Consumers are dependent on mobile phones compared to laptops which are witnessing a major decline; however, gaming laptops and designer laptops are showing growth.

Among the other growing segments are activity trackers and organic light-emitting diode (OLED) TVs.

“The fastest growing category under portable consumer electronics is activity wearables due to growing activity awareness and healthy lifestyle among the people. Wearables, including trackers and smartwatches, are growing 60 per cent in volume and 32 per cent in value,” he said.

OLED TVs are witnessing a growth (28 per cent in volume, albeit from a low bas) as a lot of new players have entered the market. Even though LG was still the lone player in the OLED TV space last year, Sony, Loewe, Toshiba, Grundig, Philips, Bang & Olufsen and Panasonic have entered the bandwagon this year.

He said that tablets are witnessing a growth of 1.3 per cent while home cinema and speaker systems are witnessing an 8.9 per cent growth.

“Bluetooth speakers are growing 24 per cent in value but smartphones are growing at 3.2 per cent in volume but lower compared to 9 per cent last year but in terms of value, it is witnessing a slower growth of 4.18 per cent,” he said.

He added that cameras in smartphones have improved this year and this is impacting DSLR and analogue camera sales overall, around nine per cent in volume and 10 per cent in value. Only niche and professional people are buying DSLR cameras. Camcorder sales are expected to fall by around 24 per cent in volume and value.

VAT will slow down the industry in first three months The GCC-wide value-added tax (VAT), scheduled to launch in 2018, is going to impact the consumer electronics industry and consumers in the UAE are aware of it, an industry expert said.

“Consumers are very pessimistic and very scared and that is going to hit consumer confidence in a big time. But when VAT comes into play and consumers see that the prices have not increased much, except for big appliances and big TVs, they will go and buy it but it will impact in the first quarter of next year,” said Ahmad Bakr, research analyst at Euromonitor International Middle East.

Euromonitor expects sales to pick up from June or July, irrespective of the VAT. “People will buy their products before VAT is introduced and that will slow down the industry for the first three months,” he said.


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