2012-02-16 02:22:36 - Recently published research from Business Monitor International, "Lebanon Information Technology Report 2012", is now available at Fast Market Research

The total size of the Lebanese IT market in 2012 is forecast by BMI at US$350mn, up from US$315mn in 2011. BMI expects a market CAGR of 12% for 2012-2016. Lebanon's IT spending is forecast to record double-digit growth in 2012 as the market consolidates the recovery from the impact of the economic crisis.

There are potential opportunities for IT vendors in sectors such as telecoms, banking, utilities, real estate and government, but much will depend on the political stabilisation necessary to implement economic reforms. Many uncertainties continue to surround the Lebanese IT market, with considerable latent potential mitigated by an unstable political outlook and a mixed picture regarding economic policy. Lebanon's IT market is set to benefit from new investment

in telecoms infrastructure in 2011, aimed at significantly scaling up the country's inadequate broadband facilities. Smaller business is a key opportunity, as small and medium-sized enterprises (SMEs) account for a majority of Lebanon's 700,000 businesses, although lack of access to financing is a barrier.


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Industry Developments

Lebanon faces a wide variety of challenges. These include infrastructure rebuilding, economic and social stabilisation, restoring trust in politics and improvement of the security situation. There are also a number of specific ICT challenges on the government's agenda, such as improving ICT infrastructure, overcoming the digital divide, investing in IT skills, making businesses more efficient through technology and e-government.The Lebanese government is also implementing a comprehensive overhaul of the public healthcare system.

In 2011, new bandwidth arrived in the Lebanon, via fibre-optic cable from Egypt and Cyprus. Efforts are also under way to expand 3G mobile broadband to 80% to 90% of the country. It was estimated that Lebanese broadband capacity could potentially increase 250% as a result of these developments. In 2011, Telecoms Minister Charbel Nahhas called for a chunk of the telecoms sector's annual US$1.5-1.8bn revenues to be earmarked to develop the IT and telecommunications sector in Lebanon.

In 2011, the Lebanese government also launched an initiative to stimulate the development of cloud computing in the country. Particular areas of opportunity for cloud computing include banking and retailing as organisations in those fields look to save money on hardware investments. However, further improvements in broadband infrastructure will be required before cloud services can attain critical momentum in Lebanon.

Competitive Landscape

The regional PC market remains dominated by international players such as HP, Acer and Dell, with the top five brands taking at least 50% of the market. The share held by local assemblers continues to dwindle, partly because of their relative weakness in the growing area of notebooks. In 2011, multinational IT vendors continued to work to gradually improve distribution and logistics in Lebanon and strengthen their cooperation with regional partners.

The 2006 conflict with Israel had a disruptive impact on vendor distribution channels, which in some cases have still not been fully repaired. Meanwhile, HP's continued PC market leadership has been thrown into question as a result of the vendor's announcement in 2011 that it may sell all or part of its PC division. Following the path of IBM seven years ago, HP apparently plans to focus more on higher-value software and services.

In 2011, a variety of Lebanese organisations implemented new enterprise resource planning (ERP) solutions. In September, leading contractor Qualco announced that it would implement the Coins ERP solution to provide an 'Enablement Platform'. Meanwhile, Lebanon's competitive banking sector is a key source of opportunity, with CreditBank, one of the top lenders in Lebanon, deploying a FICO analytics solution in 2011. The company's goal was to accelerate growth while controlling risk.

Computer Sales

Lebanese computer sales are projected to reach US$219mn in 2012, up from US$199mn in 2011. Consolidating the recovery from 2010, the computer market should grow at a CAGR of 11% a year to US$333mn by 2016, according to BMI forecasts, boosted by economic growth, broadband infrastructure development and government programmes.

The market is still far from saturated, with PC penetration at about 20%. Much will depend on the ability of government to push through reforms in various industries and unlock credit flow for smaller businesses in particular. Higher fixed and mobile broadband penetration would also be a key driver.

Software

BMI forecasts the legal software market to be worth US$43mn in 2012 and grow at a CAGR of 14% through to 2016. Due to the continuing problems with piracy, the domestic software market is expected to grow relatively slowly but it should be boosted by some government projects. The dominance of locally assembled PCs in the Lebanese computer market is a major barrier to reducing software piracy. 2011 saw a steady stream of new ERP implementations among Lebanese organisations. The market is predominantly an SME market, with most business customers prioritising affordability. Most smaller companies are still in the developmental phase in terms of IT infrastructure, which presents a big potential market for basic ERP and enterprise resource management (ERM) applications.

Services

The Lebanese IT services market is expected to be worth around US$88mn in 2012 according to BMI forecasts, accounting for around 24% of all IT spending in the country. Spending on services is forecast by BMI to continue to expanding as government agencies, telecoms companies, banks and other customers spend on modernisation.

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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 www.fastmr.com/catalog/publishers.aspx?pubid=1010

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