Peru Information Technology Report Q1 2014 - New Market Research Report

The Peruvian government has been looking for ways to reduce its dependence on natural resources and believes a focus on the ICT industry could facilitate this move. During the quarter, this transpired in the launch of StartUp Peru, a US$18mn project to promote IT entrepreneurship in the country. This bodes well for local companies in Peru, as it is international firms which dominate the landscape. We believe Peru's IT market will perform strongly over the medium term due to a combination of a supportive macroeconomic environment and growth trends in the IT sector. Rising incomes, low PC penetration and the declining price of devices - particularly from East Asian OEMs - will create a buoyant PC market. There are especially large opportunities in smaller cities and rural areas where PC penetration is lower than Lima, and telecoms investment is extending the reach of data networks. Our Asia Country Risk team expects weaker Chinese demand will negatively impact Peruvian trade, meaning the push for IT development looks set to continue.

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Headline Expenditure Projections

Computer Hardware Sales: PEN2.5bn in 2013 to PEN3.8bn in 2017. Tablets will outperform other form factors, but with low PC penetration and rising incomes there will remain growth opportunities for vendors of desktops and notebooks.

Software Sales: PEN600mn in 2013 to PEN1.1bn in 2017. Strong demand from companies in areas such as enterprise resource planning (ERP) will propel the market to almost double over our five-year forecasts.

IT Services Sales: PEN1.9bn in 2013 to PEN3.7bn in 2017. Peru is an emerging destination for outsourcing services, while we expect growth in cloud computing services to be robust over the medium term.

Key Trends & Developments

The PC market is expected to continue expanding over the medium term as rising incomes and declining price of devices combine to ensure sales keep increasing. The household PC penetration rate in Peru at the end of 2012 reached 30.5%, leaving room for sales growth to first-time buyers and to the upgrade/ replacement market. There is an even larger opportunity in rural areas where PC penetration was reported to be even lower at just 4.3%. However, due to lower incomes in these areas vendors will have to adapt strategies to compete in a price-sensitive segment. It is also worth noting the pressure on desktop and notebook sales from the widening availability of affordable tablets; however, BMI believes there is scope for all three form factors to experience shipment growth in the short- to medium term.

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