Argentina Information Technology Report Q4 2010
by ReportLinker.com on Dec 08, 2010
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Argentina's IT spending is forecast by BMI to grow at a compound annual growth rate (CAGR) of 14%over 2010-2014, with spending picking up in 2010 after a contraction in 2009. The IT market is ...
Argentina's IT spending is forecast by BMI to grow at a compound annual growth rate (CAGR) of 14%over 2010-2014, with spending picking up in 2010 after a contraction in 2009. The IT market is expectedto grow by around 13% in 2010, faster than domestic GDP growth. In H110 there was a sharp rise inimports of computers, which were up 76.8% year-on-year, according to figures from customs.The Argentine IT market is the second largest in Latin America. Despite the current economic crisis, thetotal value of spending on IT products and services should pass US$3.9bn in 2010 and approachUS$6.6bn by 2014. Per capita IT spend is seen as rising from US$98 in 2010 to US$158 in 2014 as themarket approaches levels last seen before the crisis of 2001. The market is dominated by the capitalBuenos Aires, which accounts for 26% of household appliance sales, including computer hardware.In 2010, government spending should be a growth area, after a quiet 2009 for government hardwaretenders, with particular opportunities in the education sector. Educational tenders will be a particular areaof opportunity, with a tender to deliver 3mn PCs to public schools announced in April. Key prospects forenterprise resource planning (ERP) implementations and systems upgrades will include companiesfocused on regional expansion and export-oriented industries.Industry DevelopmentsIn April 2010, the Argentine government was preparing to launch a tender to provide 3mn PCs to publicschools nationwide. The programme, called Conectar Ingualdad, was announced by President CristinaFernández. The tender will be run through state social security agency ANSES, with the 3mn PCs due tobe distributed in early 2011.The announcement of the government tender for 3mn notebooks computers for schools, again raisedquestions about the domestic computer industry's production capacity. The government has ruled that halfof the PCs must be manufactured in Argentina, which over three years would add at least another 500,000computers to annual production. Many experts have argued that this will be difficult, but the most likelyapproach to achieve this is likely to be through joint ventures between local and multinationalmanufacturers.October 2009, Argentina's senate approved a controversial bill aimed at imposing new taxes on luxuryitems, including electronics products. The law doubled value-added tax (VAT) on affected goods from10.5% to 21%. However, after industry lobbying, notebooks and netbooks were excluded from theproposed tax. The government said that the intention behind the proposed tax hikes was to provideassistance to the electronics manufacturing hub of Tierra del Fuego.Competitive LandscapeIn July 2010, Microsoft estimated that around 500,000 Windows 7 licenses had been sold in Argentinasince the October 2009 launch of the operating system on the local market. Microsoft forecast that saleswould rise 20% in the second half of 2010, with business demand growing 30%. Software market leaderMicrosoft Argentina expected revenues to rise 24% to around US$100mn in FY09, which ended in June2009.HP accounted for the largest share of PCs imported in H110, with 27%, according to customs data,followed by Dell with 17% and 15.3% for Lenovo. These figures did not include locally assembled PCs,which typically account for around 60% of the total. In mid-2010, Intel, which won another recentgovernment education PC tender, was among those companies expected to bid for the newly announcededucation sector tender.A major area of opportunity for IT services vendors will be public and private sector organisation demandfor help to utilise cloud computing solutions. Software giant SAP has formed an alliance with IBM,Linux systems integrator Red Hat and Argentine telecoms company Metrotel to offer hosted solutions inArgentina. Government is expected to be a key vertical and, in June 2010, Japanese giant NECannounced the launch of a cloud computing base general education system for the Ministry of Education
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