UK electronic gadgets market declining due to poor performance from Mp3 players

The UK electronic gadgets market declined by 52% in current volume terms and 7% in current value terms in 2012. The decline was attributable to the poor performance of Mp3 players, as the only luxury brand, Bang & Olufsen, withdrew its Mp3 player from the market at the end of 2011.

Mobile phones, on the other hand, grew by 8% in volume terms and 9% in current value terms in 2012, a hefty decline from its 15% volume growth and 16% value growth in 2011. Mobile phones are struggling to compete against mainstream brands such as Apple, as they continue to push innovation, style, quality and user-friendliness in each edition.

The non-grocery retail channel carries the bulk of sales for electronic gadgets, accounting for 98% in 2012. Non-store retailing, which consists primarily of internet retailing remained static at approximately 2% in 2012. According to industry experts, most mobile phone buyers want the experience of shopping, as well as holding the tangible item in their hands and feeling the weight of the phone.

In April 2012, mobile phone company, Nokia announced its decision to sell Vertu to a private equity company, Permira, which already owned brands such as Hugo Boss and Velentino, for £264 million.

With the rising popularity of Google Android smartphones, as well as the success of Apple's iPhone series, Nokia has felt the sting of a competitive mobile phone market. The divestment will allow Nokia to focus more on its current middle market Windows Phone 7 and Windows 8 OS for its smartphones.

The UK's electronic gadgets market is expected to have a much slower decline of 6% in volume terms and 2% in value terms to 2017. Since Mp3 players have fallen off the market, this is continuing to drive down the decline of the overall gadget market. Mp3 players will continue to struggle against Apple's overwhelmingly popular iPod/iPhone, and this is not expected to change in the coming years.

For more information on the UK electronic gadgets industry, see the latest research: UK Electronic Gadgets Industry

Follow us on Twitter @CandMResearch