South Korea Consumer Electronics Industry Update Quarter 2 2012

Includes 3 FREE quarterly updates

BMI View: We project that South Korean consumer electronics spending will grow by about 4.7% in US
dollar terms from US$13.3bn in 2012 to US$14.0bn in 2013, with a moderation in consumer demand
expected. In the future, the maturity of many market segments means that growth will be driven to a large
extent by product innovation, such as new models of smartphones, touch-screen handsets, as well as
emerging technologies such as OLED and Ultra-HD TV sets. The roll-out of digital TV broadcasting ahead
of analogue switch-off in 2013 will help support sales of premium TV sets. Smartphones, tablets and
internet-enabled TV sets were among the main growth areas in 2012, with Smart TV set technology a fierce
competitive battleground for vendors ahead of a possible product launch by Apple. However, the market
remains challenging for many vendors due to the dominance of domestic giants like Samsung and LG.
Headline Expenditure Projections
• Computer Hardware Sales: US$4.5bn in 2012 to US$4.7bn in 2013, +4.0% in US dollar terms. Growth
areas will include demand for mobile form factors such as tablets, as well as Microsoft's Windows 8
operating system.
• AV Sales: US$2.6bn in 2012 to US$2.7bn in 2013, +2.6% in US dollar terms. TV set product innovation
expected to be the most dynamic development.
• Handset Sales: US$6.62bn in 2012 to US$6.6bn in 2013, +5.7% in US dollar terms. Smartphones will
account for more than 90% of handset sales, far higher than the global average.