|
|
Home > Computers and Information Technology > IT Administration & Services > General Services
Chile Information Technology Report Q2 2008
|
|
Market Overview
The Chilean IT market is one of the most developed in the Latin America region and is projected to growat a compound annual growth rate (CAGR) of 10% over the 2007-2012 period. While only around 1/10the size of Brazil’s IT market, the total value of Chilean domestic spending on IT products and servicesshould pass US$2bn in 2008 and US$3bn by 2012.
The overall economic outlook is likely to become more difficult in the near term, with economic activityeasing amid inflationary pressures and a global slowdown. BMI’s view, however, remains that thefundamentals support a steady expansion of demand for IT products and services, due to higher realincomes, more financing options for consumers, and more choice. Despite regional leader rankings inmany ICT infrastructure indicators, a PC penetration rate of around 18% indicates plenty of room fororganic growth.
Given the economic context, government programmes provide an important context for marketdevelopment in the next few years. The government’s Digital Agenda 2.0 (for 2007-2010) groupstogether multiple initiatives to promote technology use in areas ranging from e-government to educationand businesses. New money to support informatisation for SMEs highlights another key segment. Theenterprise sector represents an evolving opportunity in the forecast period, with relatively low levels ofinvestment currently relative to some countries in the region.
However, a number of risks pertain to our forecast scenario, with many of the government’s ICTdevelopment plans and programmes still in a nascent stage. The government’s plans to develop Chile asan offshoring hub are arguably somewhat late and the country may struggle to differentiate itself fromlarger competitors in the region.
Industry Developments
In 2008 Chile is likely to see changes to its intellectual property legal framework, with new anti-piracybills under review by Congress. Changes to Chile’s IP laws were made as recently as January 2007, butwere widely considered insufficient. Despite general agreement on the need for further reform however,the current anti-piracy proposals have attracted criticism from IT companies for being too lenient.In another important initiative, Chile’s state development agency CORFO has launched a programme toprovide funding for projects that implement ICT for local SMEs. Applications for funding, which will bedelivered through CORFO’s IT innovation programme Innova Chile, are now being invited. SMEinformatisation appears to be a particular focus for CORFO at present.
Competitive Landscape
One driver of PC sales is growing internet and broadband penetration. In August 2007 the Chilean unit ofLenovo signed a bundling agreement with Chilean triple play (fixed telecoms, broadband and mobile)service provider VTR. Under the agreement, any VTR client signing up for triple play services has anoption to hire a Lenovo laptop for three years.
Turning to software, European giant SAP is among those enterprise software vendors positioningthemselves to benefit from the introduction of International Financial Reporting Standards (IFRS) inChile in 2009. In 2008 SAP Chile is also planning to increase its focus on mid-sized and smallercompanies. The company has launched a web portal specially focused on SMEs and providing detailedinformation about SAP’s solutions for the segment.
The fastest growing segment of the IT market is expected to be IT services, and in 2007 leading local ITservices company Sonda continued to win a series of increasingly large outsourcing tenders. However,Chile’s comptroller general has requested the National Registry to reevaluate the award to Indian ITservices giant Tata Consultancy Services (TCS) of a US$69mn IT tender which was later annulled. BothSonda and local competitor Quintec, which is contesting the decision, reportedly submitted cheaperproposals than TCS.
Computer Sales
BMI is projecting that Chile’s computer and accessories market will have a CAGR of at least 7% over the2007-2012 period. Computer sales in 2007 were put at US$753mn, and should pass the US$1bn mark by2012. The main drivers of growth in the PC segment are lower prices and greater affordability. Salesshould rise about 10% in US dollar terms in 2008 to reach US$831mn. The fastest growing segment isnotebook sales, which were around 600,000 units in 2007 and already account for around 50% of themarket by value. Government announcements of new funding to subsidise internet coverage expansion in2008-2009 should bring support to the PC market. Broadband service provider VTR’s recent co-operationwith Lenovo on a triple play bundling agreement shows the potential here.
Software
Chile’s software market is estimated to have been worth US$289bn in 2007, and the figure for 2008 isexpected to come out at a little more than US$329bn. Software CAGR for 2007-2012 is projected ataround 11%. Software has opportunities for growth over the next few years, despite a relatively highsoftware piracy rate. Software piracy was estimated to account for 69% of software in 2006, but last yearthe government mounted a more sustained campaign to reduce this. Growth will be driven by a number ofparticular factors, but sources of opportunity in the near term are likely to be the introduction ofInternational Financial Reporting Standards (IFRS) in Chile as of January 1, 2009 and potential new antipiracylaws.
IT Services
Chile’s IT services market is estimated to have grown around 18% in 2007 to a value just aboveUS$720mn, with continued growth expected in 2008. For a developing market, the percentage of ITmarket revenues generated by services is currently around 37%, high by emerging market standards butcorresponding to other countries in the region such as Brazil. The majority of demand, around 75%, stillcomes from the large company sector, but smaller companies are also now becoming more sophisticatedin their demand. Led by the financial, telecoms and retail sectors in particular there is a trend towardsbigger managed service and outsourcing deals in the local market.
E-Readiness
Today Chile still enjoys some of the best telecommunications infrastructure in South America and rateshighly on many regional e-readiness indicators. The World Economic Forum ranked Chile 31st in theworld in its most recent survey of ‘degree of preparation to participate in and benefit from informationand communications technology’; the highest ranking in the Latin America region.
In Q407, the government allocated US$80mn to support projects aimed at boosting internet coverage. Themoney will be spent in 2008-2009. The telecommunications regulator Subtel is also planning to launch anew universal access fund in 2008.
According to BMI estimates, internet penetration reached 33.9% in 2007 and is expected to pass 40% by2012. Broadband penetration is currently rather lower at around 7%, but the government is planning toincrease options by possibly auctioning 3G mobile and fixed wireless (WiMAX) spectrum in 2008.
|
Similar Products
• IT Support, CRM & Data Processing Services - Industry Market Research Report
Published Jun 2008 by IBISWorld
• Japan IT Solutions 2008 - 2012 Forecast and 2007 Analysis
Published Jun 2008 by IDC
• Major ICT Vendors Fail to Grow EMEA Revenues in 1Q08 - Downturn First Footing?
Published Jun 2008 by IDC
• Computer Consultancy Services in Australia - Industry Market Research Report
Published Jun 2008 by IBISWorld
• Telecommunications: Germany market forecast model (Interactive Model)
Published Jun 2008 by Datamonitor
• SOHO Business Telecom Spending by Size of Business and Vertical Industry, 2007-2012 (Data File)
Published Jun 2008 by In-Stat
• U.S. Web Hosting Services 2008-2012 Forecast
Published Jun 2008 by IDC
• New Zealand Business Segment 2008-2012 Forecast and Analysis: Vertical Market Spending
Published Jun 2008 by IDC
• Computer maintenance and repair: State Market Index
Published Jun 2008 by BizMiner
• Srilankan ICT Market Analysis
Published Jun 2008 by RNCOS
|
|
|
|
0 items
