Recent Study: Brazil Information Technology Report Q4 2013

From: Fast Market Research, Inc.
Published: Thu Oct 24 2013

The weaker consumer outlook in Brazil resulted in a minor downward revision to our forecast in the previous update. However, most IT companies reported continuing and even strong growth in Q213. We believe the weaker currency and consumer outlook should not obscure the strong underlying growth story for the IT market over the medium term. We forecast Brazil IT market spending will reach BRL53.5bn in 2013, an increase of 9.6% from BRL48.8bn in 2012. Growth is being sustained by several trends, including a booming first-time buyer and upgrade/replacement market for PCs, strong demand for tablets (including procurements for education), enterprise and government modernisation and demand for cost savings to be delivered via cloud computing. Over the medium term, the IT market will benefit from Brazil's hosting of the 2016 Olympic Games and 2014FIFA World Cup, which is expected to drive billions of dollars of IT-related spending. The opportunities for smart cities are also becoming more prevalent, as companies establish partnerships with local governments in what could become a multi-billion dollar business.

Full Report Details at

Headline Expenditure Projections

* Computer Hardware Sales: BRL20.7bn in 2012 to BRL22.2bn in 2013; +7.3% in local currency terms. Growth for 2013 has been downgraded on a weaker consumer outlook; however, sales growth will still be strong as a new range of lower priced tablets become available.
* Software Sales: BRL8.4bn in 2012 to BRL9.4bn in 2013; +12.2% in local currency terms. Investment by enterprises, particularly SMEs, in cost saving and capacity-increasing software such as ERP is driving growth. Enterprises are increasing investments in IT generally to improve competitiveness and lay the foundations for expansion, with software the main beneficiary.
* IT Services Sales: BRL19.7bn in 2012 to BRL21.9bn in 2013, +11.0% in local currency terms. We expect demand for cloud computing to be the leading driver of sales growth while the nascent machineto- machine communications market shows signs of take-off, particularly in utilities and e-health verticals.

Risk/Reward Ratings

Brazil has moved down to fourth in our Q413 Risk/Reward Ratings for the IT sector, overtaken by Chile. It still has the second highest industry rewards score in the region, however, with a score of 65.0 out of 100.

Key Trends & Developments

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