Boston, MA -- (SBWIRE) -- 05/15/2013 -- BMI projects that Argentine consumer electronics spending will grow by about 4% in US dollar terms in 2013 to US$5.7bn, with our headline forecast unchanged despite an uncertain economic outlook. 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$2.5bn in 2012 to US$2.5bn 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, +86% 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 43.9 out of 100.0, putting it 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.

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