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UK Consumer Electronics Market Outlook

Futuresource Consulting provided insight into where the UK Consumer Electronics market is going, and what movements we should expect to see by the upcoming winter holiday season.

Consumer appetite for High Definition TV (HDTV) shows no signs of slowing, with the 2010 football World Cup and 2012 London Olympics expected to help drive interest across Europe. Flat panel sales are currently driven by people replacing their CRT TV sets, and also by demand for smaller screen sizes as second and third displays are purchased for use in the kitchen or bedroom.

The UK remains the lead market in Europe, with shipments last year reaching 8.8 million units, and Futuresource forecasts show the UK market will grow to 9.6 million units in 2009. However, price drops during the latter half of 2008 and into 2009 have had a negative impact on TV vendors, with overall TV revenues expected to fall this year.

LCD has captured more than 90 percent of flat panel sales, and future growth will be driven by value-added features such as LED, high screen refresh rates, ultra-thin screen technologies and 3D, as well as continued migration to larger screen sizes. Plasma technology will continue to lose share to LCD, but will remain significant in screen sizes of 50 inches and above.

All flat panel HDTVs are capable of handling any HD input and scaling it appropriately, whether the screen resolution is 720 or 1080. However, the falling price premium for 1080p displays and the increasing amount of content available in Full HD from Blu-ray players and PS3 games consoles is driving a clear path towards 1080p screen adoption.

From a market of negligible size in 2007, the Netbook personal computer reached nearly six million units across Europe in 2008, and in doing so exposed a gap in the market for Notebooks that are configured primarily for internet usage and very little else.

In the UK, Netbooks accounted for over one in ten sales of the UK PC market last year and Futuresource expects this trend to continue into 2009, as more and more vendors move into the low cost computing category.

The UK market is expected to reach close to 2.5 million units this year, representing year-on-year growth of more than 70 percent, with a large segment of the market being attracted by newer, cheaper netbooks offering increased functionality.

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