New Market Report Now Available: Argentina Information Technology Report Q2 2010

May 2, 2010 - PRLog -- Argentina's IT spending is projected by BMI to grow at a compound annual growth rate (CAGR) of 12% over 2010-2014, with spending expected to pick up in 2010 after a sharp contraction in 2009. The IT market is expected to grow by around 8% in 2010. The consumer notebook segment should again be a growth area, thanks to tax concessions and lower prices.

The Argentine IT market is the second largest in Latin America. Despite the current economic crisis, the total value of spending on IT products and services should pass US$4.1bn in 2011 and reach US$5.9bn by 2014. Per capita IT spend is seen as rising from US$93 in 2010 to US$140 in 2014. The market is dominated by the capital Buenos Aires, which accounts for 26% of household appliance sales, including computer hardware.

In 2010, government sector spending should be a growth area, after a quiet 2009 for government hardware tenders. Many government organisations delayed PC procurements in 2009, but the second half of the year saw things start to improve at national and provincial levels. Industry Developments

In October 2009, Argentina's senate approved a controversial bill aimed at imposing new taxes on luxury items, including electronics products. The law doubled value added tax (VAT) on affected goods from 10.5% to 21%. However, after industry lobbying, notebooks and netbooks were exlcuded from the proposed tax. The government said that the intention behind the proposed tax hikes was to provide assistance to the electronics manufacturing hub of Tierra del Fuego.

Argentina's government continued to roll out a number IT-related projects in 2009. One area of spending was computers in education, with a tender launched in August for 250,000 netbooks to be distributed to students of public schools. The budget for this programme is reportedly US$150mn which, in addition to the netbooks and 1,155 servers, also covered shipment and installation. There has also been a drive to introduce e-invoicing by the government and throughout the economy. In H109 Argentina's tax agency, the Administracion Federal de Ingresos Publicos, announced that it was to introduce compulsory e-invoicing for independent professionals and others, starting in November that year. The introduction of e-invoicing is targeted mainly at professionals and companies with annual revenues of US$100,000 and above.

Competitive Landscape

The consumer segment is an increasingly important PC competitive battleground in Argentina. In November 2009, Chinese PC giant Lenovo claimed to have increased its share of the Argentine market to 4% from 1.4%, thanks to consumer sales, while enterprise sales slumped. Recognising that availability of credit is an important driver for consumer demand, Lenovo has launched a credit programme for resellers. Software market-leader Microsoft Argentina expected revenues to rise 24% to around US$100mn in FY09, which ended in June 2009. Microsoft hopes that the launch of its Windows 7 operating system, in October 2009, will boost its local sales. FY09 brought changes in the structure of Microsoft Latin America, which involved establishment of some new country subsidiaries, including Microsoft Argentina.

IT services vendors have responded to an evolving market by investing in infrastructure, developing new services and reaching out to new segments. In September 2009, Indian IT giant Tata Consultancy Services (TCS) opened a new global delivery centre in Buenos Aires, which will initially employ 250 staff. Meanwhile, earlier in 2009, IBM's IT outsourcing centre in Buenos Aires was upgraded to global delivery centre status, as one of the top IBM IT services centres worldwide.

Computer Sales

BMI projects that Argentina's computer and accessories market will have a CAGR of around 9% over 2010-2014, reaching around US$2.9bn by 2014. Argentine sales of computer hardware are forecast to return to positive growth in 2010, following a low single-digit contraction in volume sales in 2009. One market bright spot was netbooks, which were on course to account for around 15% of total PC shipments.

Notebook sales reached around 900,000 units in 2009, while desktop shipments declined by an estimated 40%, as corporate demand faltered. Going forward, drivers should include affordable PC programmes for households and schools, as well as growing broadband penetration, retail channel expansion and the popularity of notebooks and netbooks.

Software

Argentina's software market is projected to be worth US$650mn in 2010 and software CAGR for 2010- 2014 is forecast at around 10%, despite the economic climate and high annual software piracy losses. 2010 should see a boost from systems upgrades deferred from 2009, when the economic crisis had an impact in public and private sectors.

Demand from small and medium-sized enterprises (SMEs) for enterprise resource planning (ERP) applications should continue to grow, particularly in relatively untapped provincial areas. The main functional category currently remains ERP solutions, estimated to account for more than 80% of the enterprise software total. However, vendors will increasingly look to applications such as customer relationship management (CRM) and business intelligence, where faster growth is projected.

IT Services

Argentina's IT services market is forecast at around US$1.1bn in 2010, with a return to double-digit growth after a sharp deceleration because of the economic contraction in 2009. For a developing market, the percentage of Argentine IT market revenues generated by services is fairly typical at around 25%, although lower than some other countries in the region where the services share is already above 30%.

IT services revenues are expected to grow faster than the market as a whole, with CAGR for 2010-2014 projected at about 14%. Led by the financial, telecoms and public sectors, there is a trend towards bigger managed service and outsourcing deals in key sectors of the local market. However, traditional services such as desktop support are still the mainstay.

E-Readiness

Argentina has one of the most dynamic telecoms markets in the region, with a dramatic expansion in the number of mobile subscribers in the past few years. Fixed-line penetration is among the highest in Latin America, providing a good platform for strong growth in broadband services adoption.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/59161_argentina_information_te...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.