Chilean IT spending is expected to grow to around U$3.2bn in 2014, from US$2.2bn in 2010. The Chilean IT market is one of the most developed in the Latin American region and, despite current economic headwinds, is projected to increase at a compound annual growth rate (CAGR) of 11% over the 2010-2014 period.
Chile retains some strong IT market fundamentals
including consumer affluence and relatively favourable business environment. Business spending should receive a boost in 2010 from computer hardware tenders delayed from 2009 and the launch of Microsoft’s Windows 7 operating system. There are expected to be areas of opportunities in the government sector, with a stream of tenders delayed from 2009. Chile’s development as an offshoring location will attract more investment in IT services, with sectors like retail, distribution, financial services, telecoms and healthcare all offering opportunities. In 2009, despite the global economic crisis, major multinationals such as General Electric and JP Morgan proceeded with plans to establish service centres in Chile.
Industry Developments
Chilean President Sebastián Piñera has set out a number of proposals for the domestic IT sector, including tax breaks for IT companies that invest in Chile as an IT services hub. Some other proposals in Piñera’s plan have positive implications for the domestic IT market. They include increased use of IT in classrooms, and expanding digitalisation of public entities beyond traditional flagship projects. Government spending on IT projects is expected to rise in 2010, with Q110 seeing the launch of a number of new projects. In early 2010, some significant public sector software tenders were announced, including an US$80mn tender from Chile’s National Registry. Meanwhile, the Civil Registry was analysing bids for a separate US$300mn tender to supply e-ID cards and passports.
Among major projects launched in 2009 was the Enlaces programme to provide IT for schools. The programme, led by Chile’s education ministry, involved the set-up of a US$3.7mn fund to subsidise IT purchases for more than 2,000 schools throughout the country. Schools will be able to use the fund to acquire education software and devices, with standards and prices established by the ministry.
Competitive Landscape
Telecoms service providers have emerged as a significant channel for PC sales in the Chilean market. HP has predicted double-digit growth in Chilean sales in the next few years. The company has an agreement with Chilean telecoms company Entel by which Entel will sell HP 3G laptops bundled with its own 3G services. HP hopes to sell 30,000 laptops through this channel in 2009. Meanwhile, in December 2009, local telecoms company Claro launched a bundling offer of Packard Bell netbooks with the Windows 7 operating system and a 3G chip preinstalled.
In 2009, early signs were promising for local sales of Microsoft’s new Windows 7 operating system. Chilean market sales of Windows 7 during Q309 double Q308’s combined sales of XP and Vista, as retailers stocked up for the official launch. Microsoft dominates the Chilean operating system market segment, despite a piracy rate of 68%, and revenues from software licensing were estimated at US$129mn in 2009.
IBM enjoyed more success in the Chilean market in Q110 with an agreement with Chile’s LAN Airlines to administer its technology platform for the next five years. Under the terms of the estimated US$15mn contract, IBM will provide administration, operation and control of the platform. In 2009, IBM signed an agreement with Chilean systems integrator Synapsis to jointly offer solutions in Chile and a number of other regional markets.
Hardware
We forecast that Chile’s computer and accessories market will have a CAGR of around 8% over the 2010-2014 period. PC sales in 2010 are forecast at US$781mn, up from US$712mn in 2009, when the market suffered a contraction. However, spending should pass the US$1bn mark by 2013. In 2009 the main driver of decline in volume sales was desktops, with shipments down by around 30% in H109 as businesses deferred replacement purchases. Notebook sales continued to grow even in the difficult first quarter of the year; however, most of the growth was driven by low-cost netbooks, meaning that PC revenues contracted by more than unit shipments.
Software
Chile’s software market is projected to be worth US$338mn in 2010, with high single-figure growth compared with 2009. Software CAGR for 2010-2014 is projected at around 12%. The recession led some companies to review IT budgets or look to defer systems updates, but other companies viewed software investments as a means of achieving greater efficiencies in difficult times. In early 2010, some significant public sector software tenders were announced, including an US$80mn tender from Chile’s National Registry. Piracy was estimated to account for 68% of software in 2008, up 1% on the 2007 level, despite a sustained government campaign to reduce this.
IT Services
Chile’s IT services market is projected at around US$859mn in 2010 and is expected to grow at a 13% CAGR over the 2010-2014 forecast period. The percentage of IT market revenues generated by services is currently around 37%, high by emerging market standards but similar to other countries in the region, such as Brazil. The majority of demand, around 75%, still comes from the large company sector, but smaller companies are now becoming more sophisticated in their demand.
Q110 saw a number of significant IT projects launched in sectors ranging from local government to transportation. Led by the financial, telecoms and retail sectors in particular, there is a trend towards bigger managed service and outsourcing deals in the local market. Healthcare IT is underdeveloped in Chile and therefore represents a significant opportunity.
E-Readiness
The government is planning to increase Chile’s broadband options by auctioning 3G mobile and WiMAX. For 2008-2009, the government allocated US$80mn to support projects aimed at boosting internet coverage. The telecommunications regulator Subtel also launched a new universal access fund in 2008.
In general, Chile enjoys some of the best telecommunications infrastructure in South America. In a recent survey, the World Economic Forum ranked Chile 31st in the world in the category of ‘degree of preparation to participate in and benefit from information and communications technology’, the highest ranking in the Latin American region. However, the report concluded that Chile’s e-development was held back by some familiar failings including an inefficient government bureaucracy and over-regulation.
Artículo original
Well I'm going to do a quick course in English to read this post.
ResponderBorrarMauro wonder that this torture with your compatriots if they just talk and bad Spanish, and you read it costs you put a notice in English to see how well you're going.
En Español:
Bueno me voy a hacer un rapido curso de ingles para leer este post.
Pregunto Mauro por que torturas con esto a tus compatriotas si apenas hablan y mal el español, leerlos le cuesta y vos le pones una noticia en ingles para que vean lo bien que le vas.