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 Administraci

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Argentina Information Technology Report Q2 2010
Published on April 2010
Report Summary
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 Administración Federal de Ingresos Públicos, 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
Argentina Information Technology Report Q2 2010 Page 1/5

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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$1.1bn in 2010, with a return to double-digit growth after a sharp deceleration
because of the economic contraction in 2009. For a developing market, the percentage of Argentine IT market revenues generated by
services is fairly typical at around 25%, although lower than some other countries in the region where the services share is already
above 30%.
IT services revenues are expected to grow faster than the market as a whole, with CAGR for 2010-2014 projected at about 14%. Led
by the financial, telecoms and public sectors, there is a trend towards bigger managed service and outsourcing deals in key sectors of
the local market. However, traditional services such as desktop support are still the mainstay.
E-Readiness
Argentina has one of the most dynamic telecoms markets in the region, with a dramatic expansion in the number of mobile
subscribers in the past few years. Fixed-line penetration is among the highest in Latin America, providing a good platform for strong
growth in broadband services adoption.
Table of Content
Executive Summary .6
SWOT Analysis 9
Argentina IT Sector SWOT ..... 9
Argentina Telecoms Sector SWOT . 10
Argentina Political SWOT .... 11
Argentina Economic SWOT .. 12
Argentina Business Environment SWOT 13
Latin America IT Business Environment Ratings .....14
Table: Regional IT Business Environment Ratings ...... 16
Market Overview .....17
Latin America Regional Market Overview .. 17
Market Growth & Drivers .... 19
Sectors & Verticals ...... 21
Government Authority 23
Industry Developments 28
Industry Forecast Scenario ....32
Table: Argentina ' IT Industry (US$mn Unless Otherwise Stated) ........ 34
Internet . 35
Telecom Sector ' Internet ' Historical Data And Forecast .. 35
Macroeconomic Forecast ......37
Table: Argentina ' Economic Activity ... 39
Competitive Landscape ..40
Hardware .. 40
Argentina Information Technology Report Q2 2010 Page 2/5

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Software .... 42
IT Services 43
Company Profiles ...45
Microsoft ... 45
Dell (Argentina) .... 47
Sicsa 48
Country Snapshot: Argentina Demographic Data ....49
Section 1: Population ... 49
Table: Demographic Indicators, 2005-2030 ... 49
Table: Rural/Urban Breakdown, 2005-2030 .. 50
Section 2: Education And Healthcare .... 50
Table: Education .. 50
Table: Life Expectancy, 2005-2030 ....... 50
Section 3: Labour Market And Spending Power . 51
Table: Employment Indicators, 2001-2006 ..... 51
Table: Consumer Expenditure, 2000-2012 (US$) ........ 51
Table: Average Annual Manufacturing Wages, 1995-2001 .. 52
BMI Methodology ...53
How We Generate Our Industry Forecasts ..... 53
IT Industry 53
IT Ratings ' Methodology ..... 54
Table: IT Business Environment Indicators .... 55
Weighting .. 56
Table: Weighting Of Components .. 56
Sources ..... 56
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