EL SEGUNDO, CA – The Indian A/V consumer electronics market will grow to $6.59 billion by 2011, a CAGR of 10% from $4.5 billion in 2007, iSuppli Corp. predicted in a report issued today.

India’s consumer electronics industry had a market size of $3.89 billion in 2006, catering to a population of more than one billion people, iSuppli says.

India’s growth will be aided by a growing consumer confidence because of rising disposable incomes; easy financing schemes making purchases possible; increased local manufacturing; expanding distribution networks, and sporting events, such as the Cricket World Cup, says iSuppli.

Television continues to be the mainstay of the consumer electronics industry in India, with the transition slowly occurring to newer technologies such as LCD and plasma, the company adds.

iSuppli expects domestic manufacturing to be a key characteristic of growth in the following years. Although electronics production has remained a miniscule portion of overall Indian manufacturing for a long time, the trend is gradually changing.

Domestic consumption is reaching significant size to trigger manufacturing in the electronics sector.

India also is assuming a significant place in the global plans of several major electronics manufacturers, thereby positioning it as an export base, says iSuppli.

Furthermore, fabless companies are suitable to cater to such development because they can assist in moving the industry up the value chain by creating design-service opportunities for the Indian market.

EMS and ODM companies in India have been associated with several design companies, although such relationships represent an extension of global relationships. However, some local partnerships also are appearing, such as Flextronics’ deal with inSilica for the development of system-on-chip packages, says the company.

As the local market gains size, these associations will become more common, the firm believes.

iSuppli says challenges facing the India consumer electronics industry include declining margins for many players; inverted duty structure; expansion of distribution reach; creating awareness about new technologies and products, and low affordability level of consumer products among the rural masses.

• Prev
• Next