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BMI's Executive Summary[TOP] Market Overview The Argentina IT market is the second largest in the Latin America region and is projected to grow at a compound annual growth rate (CAGR) of 9% over the 2007-2012 period. The total value of IT spending on IT products and services should pass US$3bn in 2009 and be approaching US$4bn by 2012. Despite double-digit growth in the PC sector in 2007, a PC penetration rate of around 22% currently indicates plenty of room for growth. The overall economic outlook is constructive for growth in IT spending with the consumption-led economic expansion exceeding expectations in 2007 when GDP growth was around 8%. With the continuing recovery from the economic crisis of 1998-2002, company spending on IT products and services is likely to approach pre-crisis levels during our forecast period. The consumer segment should also continue to register strong growth due to rising incomes and the cheaper US dollar, and more flexible terms from retailers. Government spending will remain a key support to the market. However, a number of risks pertain to our forecast scenario. The market is characterised by significant income and geographical disparities, and the financial turmoil surrounding the US credit woes could have a negative impact on Argentina's economic growth outlook. Industry Developments 2007 saw the continuation of government efforts to expand computer penetration to under-served segments of the population. In July the government launched a new government initiative PC Abuela, or 'Grandmother PC'. As the name suggests, the programme is aimed to overcoming a particular digital access gap, that of low PC penetration among pensioners. With 10% of the population over 65, this group has been identified by the government as a key demographic for its campaign to reduce the digital divide. Meanwhile, in 2007 Telefónica Negocios, a unit of regional telecoms giant Telefónica that offers services to SMEs and professionals, launched a programme aimed at encouraging computer use by SMEs. Under a special promotion called 'Puesto de Trabajo', customers signing up to an internet and voice package with Telefónica will receive a free computer together with maintenance and support, and software licences. Competitive Landscape Argentina's booming PC market is providing an opportunity for local brands such as Air Computers, Ceven, PC Arts and Sicsa to grow. Leading local vendor Sicsa plans to strengthen its market positionstrong in the laptop segment where Dell, HP, Lenovo, Toshiba, and Apple are among the market leaders. SAP is the market leader in the growing enterprise applications segment, which is also attracting new invest from vendors. In 2007 SAP set up a US$2.5mn shared services centre in downtown Buenos Aires which will have fifty employees. In the IT services segment there has been a growing number of large deals with international vendors such as IBM among those benefiting. In 2007 Argentina's fourth largest financial institution signed an agreement with IBM for servers and applications migration. Computer Sales BMI is projecting that Argentina's computer and accessories market will have a CAGR of at least 8% over the 2007-2012 period. For 2007, market revenues were put at US$1.29bn, and should be approaching the US$1.8bn mark by 2012. Annual computer sales, currently around 1.5mn units a year, are increasing at a rate of around 20% a year. As elsewhere in Latin America, the main drivers of growth include the fall in the value of the US dollar as well economic growth and rising incomes, which are bringing computers within the reach of a greater proportion of the population. Affordability has also been boosted by a greater availability of financing options from retailers and vendors with government encouragement. Software Argentina's software market is estimated to have been worth US$422mn in 2007, and the figure for 2008 is expected to come out at a little more than US$464bn. Software CAGR for 2007-2012 is projected at around 10%, despite high annual software piracy losses. Enterprise software accounts for around half of total software revenues. The main functional category currently remains ERP solutions, estimated to account for more than 80% of the enterprise software total. Demand will remain strong in the near-term due to the large potential market represented by SMEs in many parts of the country. IT Services Argentina's IT services market is estimated to have grown around 11% in 2007 to a value of just short of US$700mn, with similar growth expected in 2008. For a developing market, the percentage of IT market revenues generated by services is fairly typical at around 25%, but lower than some other countries in the region where the services share is already above 30%. However, services revenues are expected to grow faster than for the market as a whole, with CAGR for the 2007-2012 period in the low double-digit range. E-Readiness Argentina possesses one of the most dynamic telecoms markets in the region, with a dramatic expansion in the number of mobile subscribers over the past years. Fixed line penetration is also among the highest in the region, providing a good platform for strong growth in broadband services adoption. According to BMI estimates, the number of Argentine internet users reached 12.2mn in 2007, representing 31% of the population. The percentage of broadband subscribers in the general population was 5.6%, compared with 2.2% in Brazil. |
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CONTENTSExecutive Summary
SWOT Analysis
Market Overview
Industry Forecast Scenario
Macroeconomic Forecast
Competitive LandscapeCompany Profiles
BMI Forecast Modelling
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