Consumer durables is a cataloguing of consumer goods that are not essential to be bought very often as they are fashioned in a way so as to last for an extended period of time. Profits in the consumer durables sector were most profoundly…
BMI View: The Argentine IT market has considerable potential, but economic challenges have been a drag
on growth in recent years. Challenging economic conditions are again a negative for IT demand in 2016 as
a result of the devaluation of the peso in December 2015, particularly in the hardware segment where price
rises reduced affordability. However, over the forecast period our Country Risk team envisages economic
normalisation, as well as peso appreciation, that will unlock the potential of the IT market and push
spending to a stronger trajectory, particularly in US dollar terms. Our core scenario is for a CAGR of 9.7%
over 2016-2020 in local currency terms, but an even stronger CAGR of 13.4% in USD terms.
Latest Updates And Industry Developments
? Computer Hardware Sales: From ARS24.7bn in 2016 to ARS32.5bn in 2020, corresponding to a
compound annual growth rate (CAGR) of 7.1%. Pent-up demand after disruption over 2014-2016 means
there is potential for strong growth over the medium term, but downside should smartphones cannibalise
retail PC sales to a greater extent than we currently envisage.
? Software Sales: From ARS19.5bn in 2016 to ARS29.0bn in 2020, a CAGR of 10.4%. Economic crises
have focused demand on cost-saving and flexibility-enhancing solutions, but software exports have
benefited through greater competitiveness as a result of devaluation.
? IT Services Sales: From ARS29.9bn in 2016 to ARS45.8bn in 2020, a CAGR of 11.2%. The cost-saving
potential of IT services has insulated the segment from the worst effects of economic uncertainty, and
outsourcing and cloud computing are expected to continue to perform well.