This market brief deals with electronic products used in homes as well as battery driven portable and personal sets. Telephones including mobile phones are not included in this market brief. Car radio equipment is also left out for reasons explained in Section 2.5 below.

After several sluggish years the market recovered in 1997 and has increased every year since. In 2000 the market was worth SEK 6,555 million. In 200 1 the market had grown to SEK 6,625 million and in 2002 to SEK 6,777 million. The forecast for 2003 is SEK 6,987 million.

Market trends are influenced by three main developments; the purchasing power of households, the currency exchange rates (as most products are imported) and technical innovations.

The two main reasons for the long period without growth between 1992 and 1996 were the devaluation of the Swedish krona (SEK) in November 1992 and the deep recession of the Swedish economy, which started in 1991.

Technical innovations influence the market positively in two ways. Completely new products open up new markets, although they may also shrink the markets for older products. Improvements and new developments in existing products create renewed interest among consumers and, perhaps more importantly, make the products more valuable and thus increase unit prices and the overall market.

Developments within the markets for different products happen at different times, so this aspect must be dealt with product by product. Generally speaking though, no really important new products reached the Swedish market during the past several years before 1997. In that and the following years several new products were introduced on the Swedish market, such as 16:9 Wide-TV, digital and plasma TV and DVD, which have helped the consumer electronics business to reach new record sales in the past several years.

The largest product group within home electronics is TV .TV sales in 2000 were a record -675,000 sets valued at retail prices excluding VAT at SEK 2,885 million. In 2001 sales declined a little to 655,000 sets worth SEK 2,840 million. In 2002 sales remained at 655,000 sets but the sales value increased to SEK 2,965 million. The forecast for 2003 is that the market will grow a little to 658,000 sets worth SEK 3,070 million. The growth in money terms is mainly due to increased sales of 16:9 and flat screen TV-sets.

The wide screen 16:9 sets were introduced on the Swedish market in 1997. In 2001 174,000 16:9 sets we sold and in 2002 187,000 sets. Over 28% of the sets sold in 2002 were wide screen sets. The sales of 28" and smaller 4:3 sets have declined as the wide screen sets have taken market share and were 383,000 sets in 2002. In 2001 flat screen plasma and LCD sets were introduced on the Swedish market. In 2002 sales of these sets had reached 6,000 sets. Sales of TV-Video combination sets have stagnated and were 77,000 sets in 2002.

Two-thirds of the TV -sets sold had stereo sound. These proportions have increased slowly over the past several years.

Together these three products form the second largest product group within consumer electronics. Retail sales of this product group in 2000 were 420,000 VCRs, 80,000 camcorders and 95,000 DVD-players. The sales value was SEK 1,620 million. In 2001 355,000 VCRs, 77,000 camcorders and 185,000 DVD-players were sold at a value of SEK 1,705 million.

In 2002 sales of VCRs were 335,000 valued at SEK 455 million. Sales of camcorders were 82,000 valued at SEK 630 million while DVD-player sales were 300,000 worth SEK 540 million. Taken together the sales of these products was worth SEK 1,625 million. The decline was due to lower sales of VCRs and lower prices for DVD-players.

With more programming on the market for the DVDs and with the introduction of recordable DVDs, sales of DVD-players increased rapidly after a slow start in 1997.

Of the 335,000 VCRs sold in 2002 195,000 were stereo. Of the 82,000 camcorders sold in 2002 56,000 were digital.

The forecast for 2003 is stagnating sales in this market segment due to declining sales of VCRs systems offsetting increased sales of DVD-players. Camcorder sales are forecast to remain stable.

Digital still cameras are not included in the sales statistics or the forecast of The Swedish Association of Radio & Home Electronics Suppliers as such cameras are sold through photo shops and not through the consumer electronics trade.

This product group, which is the third largest in sales value, comprises products such as Hi-Fi systems, amplifiers, tuners, receivers, record players, CD-players, cassette recorders/players and loudspeakers. In 2002 also home movie-systems have been introduced on the Swedish market.

Sales of Hi-Fi audio products were worth SEK 1,105 million in 2000, SEK 1,010 million in 2001 and SEK 1,065 million in 2002. The forecast for 2003 is that sales of this product group will increase to about SEK 1,145 million due to increased sale of the relatively expensive home movie-systems.

The most important single product is Hi-Fi systems, i.e. combinations of the main components in an audio system. Sales of such combinations were 270,000 units in 2000, the peak year for this product, and 215,000 units in 2001. In 2002 sales had declined to 190,000 units and the forecast for 2003 is 185,000 units.

The trend towards smaller sizes continued. In 2002 75% of the combination units were of micro size and the rest of mini size. All the combinations included a CD.

The sales of receiver-based audio systems reached 65,000 units in 2000, 70,000 units in 2001 and 60,000 units in 2002. The sales of amplifier based systems were 10,000 units in both 2000 and 200 1, but declined to 8,000 units in 2002.

The sales of tuners was 5,000 units in 2000 and increased to 7,000 units in 2001 but fell back to 5,000 units in 2002.

Analogue record players had sales of only 7,000 units in 2000 and declined further to 6,000 units in 2001. 2002 sales were 6,000 units.

The market for CD-players including CD-changers has been rather stable at about 65,000 units per year for many years but fell to 40,000 units in 2001 and 20,000 units in 2002.

Sales of cassette decks and mini disc players has shown a similar decline as CD-players, with sales of 15,000 units in 2000, 10,000 units in 2001 and 5,000 units in 2002.

The main reason for the decline of these audio products is the introduction of the home movie-systems, which provide both improved audio and video enjoyment.

Loudspeakers are mostly sold as part of audio systems. Sales of separate loudspeakers were only worth SEK 90 million in 2001 and 2002.

This product group comprises smaller and cheaper products than the preceding group, such as: clock radios, portable radios, cassette radios, CD/MD cassette radios, personal cassette radios (such as Walkmans) and personal CD-players (of Discman type).

The sales of this product group have declined in unit terms the past three years, but remained relatively stable in value terms. Cheaper products such as clock radios, cassette radios and personal cassette players have lost market while such relatively expensive products as personal CD-players have gained market share.

Sales in 2000 was 1,035 units worth SEK 645 million, the highest figure so far for this product group. In 200 1 sales fell to 850,000 units worth SEK 595 million, but while unit sales declined in 2002 to 805,000 units sales value increased to SEK 625 million. The forecast for 2003 is a further decline in units to 780,000 but with unchanged sales value.

Clock radios sales declined from 150,000 in 2000 to 120,000 units in 2001 and 100,000 units in 2002.

After a rapid decline in the nineties portable radios' sales have levelled out at 100,000 units in 2000, 90,000 units in 2001 and 100,000 units in 2002.

Cassette radios have also lost market quite rapidly, from a top level of 100,000 units in 1996 to 50,000 units in 2000,35,000 units in 2001 and 25,000 units in 2002.

This development was offset by a corresponding increase in CD/MD-player radios until 2000 when sales started to decline. Sales were 225,000 units in 2000, 195,000 in 2001 and fell to 170,000 in 2002.

Analogue personal tape players, with or without radio units, had sales of 210,000 units in 2000, but fell to 125,000 in 2001 and 85,000 in 2002.

The decline in the sales of analogue personal players has been offset by the sales of personal digital CD-players. Sales of these items were 265,000 units in 2000, up from 175,000 units in 1999. In 2001 sales fell a little to 250,000 units but rose again to 280,000 in 2002.

The forecast for 2003 is stagnant or declining sales for all products in this group except personal digital CD-players, for which sales are believed to increase to 295,000 units.

Unit sales of videocassettes have levelled out after a decline in the late nineties. In 2000 10.4 million videocassettes were sold, in 2001 9.3 million and in 2002 10.3 million. Of these 475,000 were 8 mm video camera cassettes and 300,000 VHS-compact cassettes.

The sales of DVDs were 375,000 in 2000,575,000 in 2001 and 850,000 in 2002.

The value of the videocassette market including DVD was SEK 200 million in 2000 SEK 190 million in 200 1 and SEK 205 million in 2002. The forecast for 2003 is a small increase in value due to higher sales of DVDs.

Sales of audiocassettes have declined for several years. In 2000 sales were 3.5 million, in 2001 3.1 million and in 2002 2.6 million. Sales of mini discs peaked at 1.5 million in 2000, but fell to 1.3 million in 2001 and 1 million in 2002.

CDR-Audio, recordable CD discs with high fidelity sound, came on the market in 1999. In 2000 sales were 900,000 discs, in 2001 800,000 and in 2002 sales fell to 700,000 discs.

The value of the audiocassette market declined from SEK 60 million in 2000 to SEK 45 million in 2001 and 35 million in 2002. The market is forecast to continue to decline in 2003.

There is hardly any domestic production of video or audio products in Sweden. The main exceptions are radio and TV aerials. The last TV manufacturing was discontinued several years ago, and radios and Hi-Fi equipment have not been manufactured in Sweden for many years.

Swedish exports of audio and video equipment are re-exports of imported products, with the exception of aerials.

The trade statistics are unfortunately not a reliable source of information regarding the origins of Sweden's imports of consumer electronics. There are two main reasons for this.

Some products, such as loudspeakers and amplifiers, are included under the same CN numbers as products intended for other end-users than consumers.

The other and more important reason is that products imported into one EU-country are regarded as originating in that country when re-exported to another EU-country .Thus Denmark and Belgium are the leading exporting countries to Sweden of several of the products in this market brief. The reason is that several large manufacturers have their warehouses for Scandinavia in Denmark or manufacture for Europe in Belgium and ship their products to Sweden from these countries.

Some large manufacturers use their subsidiaries in Sweden as distributors to the neighbouring countries, Denmark, Finland and Norway. Thus Sweden imported 1,312,000 colour TV-sets in 2002 and exported 555,000 sets.

Japan used to be the leading exporter of several of the consumer electronics products at the upper end of the scale, but now export only high-tech products, which means small volumes. The main part of the Japanese brand products is manufactured in Europe or in the Far East outside Japan. The only exceptions are CD-players. Japan was still the number three exporter after Hong Kong and Denmark of CD-players.

At the lower end of the market for home electronics Japan left the Swedish market to other Asian exporters many years ago. Thus Hong Kong leads the exports of clock radios followed by China, and is number two after China as exporter of portable radios without cassette units. Hong Kong is the leading exporter of portable cassette players, followed by Denmark, Japan and China.

Some Central and East European countries have successfully entered the Swedish market. In 2002 Hungary and Poland were the number one and two exporters of conventional colour TV -sets to Sweden. France was the leading exporter to Sweden of wide screen sets in 2002. Hungary was the number three exporter of VCRs to Sweden after Germany and Denmark in 2002.

Except for Denmark's special situation as re-exporter, the main exporters of consumer electronics to Sweden are the EU-countries Germany, the Netherlands and Belgium and, especially of TV-sets, also France.

Most of the products in this market brief are internationally marketed branded goods. The manufacturers either have their own sales and marketing subsidiaries in Sweden or work through general agents with sole distributions rights. These subsidiaries or general agents, often called distributors, handle imports and wholesaling and marketing.

In addition to these distributors there are traders who import products with unknown or less known brand names. The products are usually small and simple, such as clock radios or portable radios, with a low price.

Consumer sales are mainly handled by radio and television retailers and to a lesser extent by department stores and hypermarkets.

There are three large multiple store chains and three voluntary chains of radio & TV retailers, who can place large orders on which the importers "give good discounts. Some of these chains also sell their own private brands in addition to leading manufacturers' brands. There are still a number of smaller radio & TV retailers with one or a few stores, which do not belong to any voluntary chain.

The traders often sell through unconventional outlets, such as advertising gift companies, mail-order companies and hypermarkets.

Similarly, a part of the satellite dish trade goes through installers who have the facilities to install the devices, whereas smaller units are sold over the counter. Decoders are sold through the satellite and cable companies who sell the programmes, radio and TV shops sell decoders for satellite signals.

The least developed GSP countries, called SPGC countries, en joy duty-free entry for all their consumer electronics products. The other GSP countries, known as SPGI countries, with one exception, enjoy duty-free entry for products with a duty of 4.5% or lower. They enjoy a reduction of 65% of the conventional duty on VCRs and video cameras and a reduction of between 30-40% of the duty on all other consumer electronic products. Malaysia has no GSP reduction.

The products must have a asp certificate of origin to enjoy the duty reductions.

Under different trade agreements, the following countries and groups of countries enjoy duty-free entry for their consumer electronic products into the EU: ACP (Lomé convention) countries, OCT territories, BCM (ex-Yugoslavian) countries, the countries around the Mediterranean, the EES countries, and the Central and East European countries including Estonia, Latvia and Lithuania.

Consumer electronics are not subject to licensing.

After 1999 the consumer electronics trade in Sweden have had some exceptionally good years. This is partly explained by the improved economic situation in Sweden which has followed the long recession in the early and middle nineties This has given consumers the confidence to invest in this type of products. The other explanation is that several interesting new products have been launched in the past few years, such as DVD, digital camcorders and wide screen TV -sets.

The year 2002 was also an unexpectedly good year in several product sectors. TV-sets continued to sell well and new plasma and LCD flat screen models were introduced.

Home movie-systems started to replace both video and sound equipment. DVD players and digital video cameras also sold well.

Nevertheless, the higher priced segments of the consumer electronics market are difficult to enter for new exporters. Consumers are quite brand conscious and will not pay several thousand Swedish kronas for products from unknown manufacturers. This is a fact the retail trade has to take into account, which means that they are reluctant to stock such unknown brands, however good they might be.

At the lower priced end of the market there is much less brand consciousness. Clock radios, portable radios and other products with low price tags at retail sell well, even if the consumers have never heard of the brands.

The many new exporters from the Far East who have captured a share of the Swedish market have shown a successful route to follow. The new exporter should start with lower priced items, sold through Swedish traders or importers/wholesalers who should have sole distribution rights, and then branch out into more sophisticated products.

An alternative route is to contract for making branded products on a sub-contract basis for some of the manufacturers of internationally known brands. The products would in that case, however, enter the Swedish and other export markets as if made by the owner of the brand name. Hungary and Poland have successfully followed this route.

Recent economic indicators point to a slowing of the Swedish economy following the downturn in the world economy. It is possible that the consumer electronics market has peaked and will level off in the next year or two despite the rather optimistic forecast the trade has made for 2003.

For this reason it may not be the very best time to try to enter the Swedish market now, but products of good quality at competitive prices usually find a market. It should be pointed out, though, that competition on the Swedish consumer electronics market is very keen. The big retail chain companies compete vigorously with each other and put pressure on the distributors to keep their prices low.