2013-10-12 14:35:19 - Fast Market Research recommends "Argentina Consumer Electronics Report Q4 2013" from Business Monitor International, now available
Argentina's domestic consumer electronics devices market, for mobile handsets and AV products, is projected at US$5.7bn in 2013 by BMI. The market has recovered since a sharp deceleration in 2009 and spending is expected to grow at a CAGR of 6.6% to US$7.1bn by 2017, driven by demand for flatpanel TV sets, notebook computers, digital cameras and other key products, and also by rising incomes and greater credit availability. Spending will be constrained by an uncertain economic outlook and our data show prices rising faster than shopping centre sales, with consumers cautious due to an uptick in unemployment. We still expect sales of mobile handsets, plasma TV sets, digital cameras and other categories of consumer electronics products to grow in
2013, as monetary and fiscal policies remain highly expansionary. BMI has warned of the risk of a substantial currency devaluation, which would have an impact on the affordability of IT products and services. Although local PC, TV and mobile phone production in Tierra del Fuego state has expanded rapidly, most of the imports used for assembly are still imported. The tax on 'luxury goods' such as mobile phones and digital cameras has dramatically boosted the sales share of locally produced goods, while sales of imported consumer electronics devices have fallen sharply.
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Headline Expenditure Projections
Computer Hardware Sales: US$2.0bn in 2012 to US$2.1bn in 2013, +2% in US dollar terms. Forecast in US dollar terms unchanged due to macroeconomic factors and analyst modification as domestic PC production continues to increase.
AV Sales: US$2.5bn in 2012 to US$2.6bn in 2013, +5% in US dollar terms. Forecast in US dollar terms unchanged, with HD and smart TV sets expected to provide the most dynamic development.
Handset Sales: US$554mn in 2012 to US$588mn in 2013, +8% in US dollar terms. Forecast in US dollar terms upwardly revised with smartphones the main revenue growth driver.
Risk/Reward Ratings: Argentina's score was 41.9 out of 100.0, remaining in seventh place in our latest Americas RRR table. BMI expects rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets, but government policies will constrain the opportunity for foreign vendors.
Key Trends & Developments
* The consumer electronics competitive landscape has been influenced by changes to the tax code. In January 2013, the government launched a new programme of subsidies for local manufacture of PCs, notebooks, tablets, digital cameras, MP3s, and other consumer electronics products. The introduction in 2010 of a luxury goods tax on imports of electronic items, from which the electronics production hub of Tierra del Fuego is exempted, has already provided a significant boost to local production of mobile phones among other device categories Local production of mobile phones was projected to comprise up to 90% of domestic handset sales in 2012. Meanwhile production of PCs reached 3.38mn units in 2011, while sales of imported devices such as Apple's iPad have fallen dramatically.
* The flat-panel TV set market in Argentina should grow in corollary with the government's implementation of a US$2bn plan for open digital TV in the country. The government has set a deadline of 2018 for completion of the country's migration to digital TV broadcasting. By 2012, two years after launching its digital TV initiative, Argentina's digital TV network reached 75% of the population, according to government figures. Argentina now has 50 digital TV stations deployed across the country.
All operators report demand for smartphones is high, and value-added services are driving revenue upwards. One innovation is smartphones enabled for digital TV, with mobile phone manufacturers such as Motorola, Samsung and LG committed to producing 400,000 such devices by April 2013. In H212, Argentine mobile operator Personal launched a tender process to acquire 140,000 mobile phones featuring digital TV, while rival operator Claro ordered 100,000 such phones from Samsung.
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