2012-02-15 03:28:10 - New Computer Technology research report from Business Monitor International is now available from Fast Market Research

Market Overview

Serbian spending on IT products and services is estimated by BMI at around US$738mn in 2012, up from US$696mn in 2011. BMI expects a market CAGR of 15% for 2012-2016 as the market revives after a contraction in 2009-2010. The country's relatively low levels of ICT development represent both an opportunity and constraint for the IT market, which is held back by levels of computer literacy, low computer and internet penetration, lack of capital and general low income levels.

Serbia's current level of per capita IT spending, estimated at around US$71 in 2010, is far lower than in countries such as Hungary and Greece, and 20% of that in fellow former Yugoslavia republic Slovenia. Trading conditions will remain challenging for

IT vendors, however, with fiscal pressures and modest private consumption and investment growth projected.


Full Report Details at
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The government's stated agenda of privatisations would, if implemented, be an important driver of spending in sectors such as banking, telecoms and utilities. Vendors will also target Serbia's 318,745 small enterprises, many of which are still looking to deploy basic IT infrastructure.

Industry Developments

In 2011, the Serbian PC market received a boost from the extension of a concessionary rate on 8% for Value Added Tax (VAT) until parliament resolved a discrepancy between a 2011 budget bill and earlier amendments to VAT law. The 2011 budget bill was passed by the Serbian parliament in December 2010, but the Serbian President Boris Tadic subsequently returned the amendments to parliament for their further consideration.

The Serbian government also targets a continued improvement in e-government, although progress has been slow due partly to low computer penetration in the population. The guiding framework is the Strategy for Public Administration Reform and the Action Plan for Public Information Development adopted in 2006. Under the plan, the Serbian government pledged funds for the establishment of an integrated electronic network covering state organisations.

The government also confirmed during 2011 its intention to invest significant funds for the development of information technology. The planned spending is in line with a strategy of strengthening Serbia's IT development through attracting new investment into the sector, skills initiatives and speeding up the application of IT. The government has also associated itself with an agenda of faster reform and privatisation which has the potential to drive IT spending in key sectors such as banking.

Competitive Landscape

The largest computer seller in Serbia is local IT leader ComTrade, with the top multinational brands being HP, Acer, Lenovo, Dell, Toshiba and Fujitsu Siemens. The Serbian computer market remains highly price-sensitive, with many consumers preferring to buy 'white boxes' assembled from Far Eastern components. Multinational vendors have strengthened their position in the Serbian brand PC market in the past few years, however.

Microsoft dominates the operating system software segment with around 90% of the market. In 2011, Microsoft signed a four-year deal with the Serbian government on purchase of Microsoft software licenses for Serbia's scientific community. The company hopes to receive a continuing boost from migrations to its new operating system, Windows 7.

The IT services opportunity is a draw for vendor investment in the country with S&T Group, IBM, HP and Combis among the market leaders. The developing market is also of interest to major regional players such as SBS and ComTrade. Cloud computing is seen as a significant, although currently small, opportunity by vendors such as HP, Cisco and others.

Computer Sales

BMI forecasts that Serbia's PC market (including notebooks and accessories) will be worth US$408mn in 2012, with a continuation of the single-digit growth projected for 2011. BMI forecasts a 2012- 2016 Serbian computer market US dollar value CAGR of 14%, with computer hardware sales including notebooks and accessories reaching US$848mn by 2016.

With only around 50% of households having a computer, the market looks set to be dominated by hardware sales for some time to come. Rising disposable incomes and progress towards EU accession are expected to be among the drivers of PC market growth.

Software

The Serbian addressable software market is projected by BMI at US$85mn in 2012 and is expected to grow at a CAGR of 12% over the 2012-2016 forecast period. Serbia lags far behind most regional neighbours in software deployment, but there is a growing awareness among enterprises of the potential benefits of utilising IT.

Spending stabilised in H111 and this trend was expected to continue into 2012, despite the still difficult trading conditions faced by businesses. SMEs will be an important target for vendors due to their generally low level of informatisation, which adds up to a big potential market for basic enterprise resource planning (ERP) and enterprise resource management (ERM) applications. Larger companies will continue to offer important opportunities, however, as the Serbian government has pledged to accelerate privatisation of key state enterprises.

Services

The Serbian IT services market was expected to be worth around US$149mn in 2012 according to BMI estimates, accounting for around 19% of all IT spending in Serbia. IT services CAGR for the sector for the 2012-2016 period is forecast at around 11%, with the market opportunity reaching US$274mn by 2016.

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