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Consumer Electronics in Argentina

Report Summary Cutting edge electronics are in demand 2010 was the year of CCFL LCDs, smartphones and netbooks despite high inflation rates. LED TVs, smartphones, netbooks and tablets are also expected to be in high demand in 2011. Overall, consumer electronics products will see a healthy market development during the forecast period and will feature new adoptions and technology migration. Consumers are likely to sustain the growth curve during the forecast period with a next high peak in 2014. Sporting events drive demand A highly positive spirit driven by the FIFA 2010 World Cup, rise in wages, and flexible payment terms defined the Argentina consumer electronics market in 2010. The FIFA World Cup hosted in South Africa during the year was the single most influential event of the year as sports enthusiasm motivated consumers to adopt the latest television technologies. This was due to the high expectations surrounding the performance of the la Albiceleste (sky blue and whites), a popular name given to the Argentinean national team, which included Lionel Messi, FIFA’s world player of the year in 2009 and 2010. Argentineans were encouraged to consume as wages were increased and highly flexible payment options were provided on purchases of electronics. In addition, Argentina hosted and won the 2010 Women’s Field Hockey World Cup. Both of these sporting events enabled all leading brands to achieve record sales. Several other key sporting events will help the adoption of consumer electronics. Local production is on the rise Non-automatic import licensing and high import duties among others challenged brands’ business plans, driving them to invest in local production based in Tierra del Fuego. Local production is obtained through acquisitions and strategic partnerships and is mainly focused on reduction in taxes for locally produced products. In February 2011, the restrained portfolio of consumer electronics products was expanded to include notebooks, netbooks, mobile phones, and others. The government aims to turn the southern province of Tierra del Fuego into a competitive production hub, much like the tax-free Manaos in Brazil. However, import restrictions remain a major challenge and are a key driver of high inflation rates. Government encourages consumption The last major credit crunch was in 2001-2002 with a strong devaluation of the local currency, which was again slightly hit at the end of 2008 by the global financial crisis. Since then the government has attempted to spur consumption by consistently pressuring banks to increase their offerings of flexible payment options that include discounts of 20% and up to 50 interest-free instalments. Thus, 2010 achieved new growth records in the sale of consumer electronics and also promises great results for 2011 and throughout the forecast period.


Digital transmission launches The state-owned Channel 7 featured the first digital transmission of the 2010 FIFA World Cup in Africa, which it did in association with the Japanese-Brazilian ISDB-T digital television standard. The government is currently working on generating awareness of the new television format while developing the local infrastructure to expand the signal’s reach through locally produced equipment. Cable operators also already offer HD television, promoting specific value-added services. This new move is likely to significantly drive sales of home and portable electronics as a whole. TABLE OF CONTENTS Consumer Electronics in Argentina - Industry Overview EXECUTIVE SUMMARY Cutting edge electronics are in demand Sporting events drive demand Local production is on the rise Government encourages consumption Digital transmission launches KEY TRENDS AND DEVELOPMENTS LCDs, smartphones and netbooks perform well despite high inflation rates Passion for sports increases technology consumption “Technology tax hike” increases prices Tierra del Fuego: a technology hub Government attempts to boost consumption Digital TV launch opens new opportunities Summary 1 Summary Leading Specialist Retailers 2010 MARKET DATA Table 1 Sales of Consumer Electronics by Category: Volume 2005-2010 Table 2 Sales of Consumer Electronics by Category: Value 2005-2010 Table 3 Sales of Consumer Electronics by Category: % Volume Growth 2005-2010 Table 4 Sales of Consumer Electronics by Category: % Value Growth 2005-2010 Table 5 Consumer Electronics Company Shares 2006-2010 Table 6 Consumer Electronics Brand Shares 2007-2010 Table 7 Sales of Consumer Electronics by Distribution Format 2005-2010 Table 8 Forecast Sales of Consumer Electronics by Category: Volume 2010-2015 Table 9 Forecast Sales of Consumer Electronics by Category: Value 2010-2015 Table 10 Forecast Sales of Consumer Electronics by Category: % Volume Growth 2010-2015 Table 11 Forecast Sales of Consumer Electronics by Category: % Value Growth 2010-2015 DEFINITIONS Sources Consumer Electronics in Argentina - Company Profiles Digital Fueguina SA in Consumer Electronics (Argentina) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND


PRODUCTION COMPETITIVE POSITIONING Frávega SA in Consumer Electronics (Argentina) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND Chart 1 Frávega SAIC e I: Frávega in San Isidro, Buenos Aires, Argentina INTERNET STRATEGY COMPETITIVE POSITIONING Summary 7 Frávega SA: Competitive Position 2010 Garbarino SA in Consumer Electronics (Argentina) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND Chart 2 Garbarino SA: Garbarino in the city of Buenos Aires INTERNET STRATEGY COMPETITIVE POSITIONING Summary 10 Garbarino SA: Competitive Position 2010 New San SA in Consumer Electronics (Argentina) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND PRODUCTION Summary 13 New San SA: Operational Indicators 2010 Summary 14 New San SA: Annual Production (‘000s units) COMPETITIVE POSITIONING Summary 15 New San SA: Competitive Position 2010 Camcorders in Argentina - Category Analysis HEADLINES TRENDS Camcorders continue to be niche products with a limited demand compared to digital cameras. Argentine consumers are still slightly reticent about these significantly more expensive products that depend on the adoption of other consumer electronics products, such as screens and storage devices, to be fully and comfortably exploited. COMPETITIVE LANDSCAPE As with digital cameras, Japanese player Sony continued to lead sales of digital camcorders in Argentina with a 33% share, followed by the historical leader for video broadcast, Audinac (JVC) and the growing Samsung Electronics. Following behind, Kodak and Panasonic have some participation as do other smaller market players. PROSPECTS Digital camcorders is expected to grow within the portable electronics category over the forecast period, demonstrating a CAGR of 12% in volume terms and 15% in constant value terms.


CATEGORY DATA Table 12 Sales of Camcorders by Category: Volume 2005-2010 Table 13 Sales of Camcorders by Category: Value 2005-2010 Table 14 Sales of Camcorders by Category: % Volume Growth 2005-2010 Table 15 Sales of Camcorders by Category: % Value Growth 2005-2010 Table 16 Camcorders Company Shares 2006-2010 Table 17 Camcorders Brand Shares 2007-2010 Table 18 Sales of Camcorders by Distribution Format 2005-2010 Table 19 Forecast Sales of Camcorders by Category: Volume 2010-2015 Table 20 Forecast Sales of Camcorders by Category: Value 2010-2015 Table 21 Forecast Sales of Camcorders by Category: % Volume Growth 2010-2015 Table 22 Forecast Sales of Camcorders by Category: % Value Growth 2010-2015 Cameras in Argentina - Category Analysis HEADLINES TRENDS Digital cameras also suffer from the extended tax hike ruling that came into place at the end of 2009. The law, reinforced in February 2011, establishes that all consumer electronics products will continue to be subject to the full VAT rate of 21%, and to an additional 17% Internal Tax unless manufactured in the southern province of Tierra del Fuego. COMPETITIVE LANDSCAPE After being the first brand to offer 3D TVs in Argentina and expanding the product portfolio to 3D Bluray players, Sony aims to bring 3D VAIO notebooks into the country as well as digital cameras Cyber??shot and Handycam, both also with 3D technology in 2011, depending on the market’s response to the 3D launches in 2010. The brand is also considering adding digital cameras to its local production in the southern province of Tierra del Fuego in the short term. PROSPECTS Digital cameras is expected to achieve slight growth within the portable electronics category with CAGRs of 3% in volume and 5% in constant value terms over the forecast period, achieving sales of ARS2 million in 2015. CATEGORY DATA Table 23 Sales of Cameras by Category: Volume 2005-2010 Table 24 Sales of Cameras by Category: Value 2005-2010 Table 25 Sales of Cameras by Category: % Volume Growth 2005-2010 Table 26 Sales of Cameras by Category: % Value Growth 2005-2010 Table 27 Cameras Company Shares 2006-2010 Table 28 Cameras Brand Shares 2007-2010 Table 29 Sales of Cameras by Distribution Format 2005-2010 Table 30 Forecast Sales of Cameras by Category: Volume 2010-2015 Table 31 Forecast Sales of Cameras by Category: Value 2010-2015 Table 32 Forecast Sales of Cameras by Category: % Volume Growth 2010-2015 Table 33 Forecast Sales of Cameras by Category: % Value Growth 2010-2015 Computers and Peripherals in Argentina - Category Analysis HEADLINES


TRENDS Argentine people like to adopt the latest technologies available in communications and IT. In Argentina there are 26 computers per 100 inhabitants, putting the country in the lead in terms of number of PCs per capita in Latin America. COMPETITIVE LANDSCAPE Hewlett Packard, Lenovo and Bangh贸 led sales of desktops during 2010. The first two are highly recognised brands that presented a healthy retailer penetration with a good offer of products. Nevertheless, Lenovo presents slightly higher prices aiming at a higher income demographic. PROSPECTS The technology tax hike was expanded in February 2011 and now includes laptops and netbooks, in addition to the already restricted LCD monitors. This is expected to slightly impact on prices. These categories have already experienced considerable increases in the last couple of years thus, the tax hike is likely to have a limited impact on demand. CATEGORY DATA Table 34 Sales of Computers and Peripherals by Category: Volume 2005-2010 Table 35 Sales of Computers and Peripherals by Category: Value 2005-2010 Table 36 Sales of Computers and Peripherals by Category: % Volume Growth 2005-2010 Table 37 Sales of Computers and Peripherals by Category: % Value Growth 2005-2010 Table 38 Computers and Peripherals Company Shares 2006-2010 Table 39 Computers and Peripherals Brand Shares 2007-2010 Table 40 Sales of Computers and Peripherals by Distribution Format 2005-2010 Table 41 Forecast Sales of Computers and Peripherals by Category: Volume 2010-2015 Table 42 Forecast Sales of Computers and Peripherals by Category: Value 2010-2015 Table 43 Forecast Sales of Computers and Peripherals by Category: % Volume Growth 2010-2015 Table 44 Forecast Sales of Computers and Peripherals by Category: % Value Growth 2010-2015 Home Audio and Cinema in Argentina - Category Analysis HEADLINES TRENDS Convenient combo offers of home cinemas or speaker systems were the best opportunity to achieve a significant increase in demand during the year of the FIFA World Cup hosted in South Africa. Most companies looked to tie these options to larger flat TVs. COMPETITIVE LANDSCAPE The global leader Samsung manufactures in Tierra del Fuego associated with local companies there such as Garbarino, Fr谩vega, BGH and Brightstar. They manufacture for Samsung mobile phones, in addition to LCD monitors and TVs under LED and CCFL technology, LED and analogue TVs. The international brand also announced the manufacture of digital cameras. However, the company has not yet defined the specific manufacturing facility for it. PROSPECTS 3D related product launches are likely to receive a moderate response in the short term, given consumers lack of confidence and their significant higher prices. CATEGORY DATA Table 45 Sales of Home Audio and Cinema by Category: Volume 2005-2010 Table 46 Sales of Home Audio and Cinema by Category: Value 2005-2010


Table 47 Sales of Home Audio and Cinema by Category: % Volume Growth 2005-2010 Table 48 Sales of Home Audio and Cinema by Category: % Value Growth 2005-2010 Table 49 Home Audio and Cinema Company Shares 2006-2010 Table 50 Home Audio and Cinema Brand Shares 2007-2010 Table 51 Sales of Home Audio and Cinema by Distribution Format 2005-2010 Table 52 Forecast Sales of Home Audio and Cinema by Category: Volume 2010-2015 Table 53 Forecast Sales of Home Audio and Cinema by Category: Value 2010-2015 Table 54 Forecast Sales of Home Audio and Cinema by Category: % Volume Growth 2010-2015 Table 55 Forecast Sales of Home Audio and Cinema by Category: % Value Growth 2010-2015 In-Car Entertainment in Argentina - Category Analysis HEADLINES TRENDS Automotive circulation achieved 25% penetration in 2010 with an average increase of 2% annually, of which 57% were passenger cars and 24% two-wheelers, which sustained the category’s growth. COMPETITIVE LANDSCAPE The in-car consumer electronics sector suffered several changes in recent years bringing new entrants to the category turning it into a more competitive arena. However, the strengthened presence of Sony in the country allowed the brand to scale to the leading position achieving 21% of total volume sales of in-car entertainment products during 2010, as one of the two main local brands to cover most of the products across the category. PROSPECTS Growth will be stimulated by the expansion of vehicle penetration, and by the adoption of new technologies and upgraded in-car electronics. Standard in-dash audio and media players will continue to face growing competition from consumer electronics products with improving audio, video, and communications facilities, eventually making it less attractive for players to operate in this category. CATEGORY DATA Table 56 Sales of In-car Entertainment by Category: Volume 2005-2010 Table 57 Sales of In-car Entertainment by Category: Value 2005-2010 Table 58 Sales of In-car Entertainment by Category: % Volume Growth 2005-2010 Table 59 Sales of In-car Entertainment by Category: % Value Growth 2005-2010 Table 60 In-car Entertainment Company Shares 2006-2010 Table 61 In-car Entertainment Brand Shares 2007-2010 Table 62 Sales of In-car Entertainment by Distribution Format 2005-2010 Table 63 Forecast Sales of In-car Entertainment by Category: Volume 2010-2015 Table 64 Forecast Sales of In-car Entertainment by Category: Value 2010-2015 Table 65 Forecast Sales of In-car Entertainment by Category: % Volume Growth 2010-2015 Table 66 Forecast Sales of In-car Entertainment by Category: % Value Growth 2010-2015 Mobile Phones in Argentina - Category Analysis HEADLINES TRENDS 2010 established the migration trend from standard feature phones to smartphones. The main drivers were the mobile companies that offered more sophisticated phones at lower prices, while improving their ARPU (average revenue per user). These players continued to launch different data plans for


accessing emails and social networks furthering the increased demand and shrinking the replacement rates. COMPETITIVE LANDSCAPE Mobile phones were highly successful in the southern province of Tierra del Fuego and promise higher growth. Mobile phones posted a sales volume of 11.9 million units of which nearly 5 million were produced in Tierra del Fuego. PROSPECTS New innovations and product launches will boost demand for replacements leading to a 7% CAGR in volume terms and 15% CAGR in constant value terms over the forecast. The continued development of new communications and technology standards will continue to be the main drivers for a constantly increasing adoption. CATEGORY DATA Table 67 Sales of Mobile Phones: Volume 2005-2010 Table 68 Sales of Mobile Phones: Value 2005-2010 Table 69 Sales of Mobile Phones: % Volume Growth 2005-2010 Table 70 Sales of Mobile Phones: % Value Growth 2005-2010 Table 71 Mobile Phones Company Shares 2006-2010 Table 72 Mobile Phones Brand Shares 2007-2010 Table 73 Sales of Mobile Phones by Distribution Format 2005-2010 Table 74 Forecast Sales of Mobile Phones: Volume 2010-2015 Table 75 Forecast Sales of Mobile Phones: Value 2010-2015 Table 76 Forecast Sales of Mobile Phones: % Volume Growth 2010-2015 Table 77 Forecast Sales of Mobile Phones: % Value Growth 2010-2015 Portable Media Players in Argentina - Category Analysis HEADLINES TRENDS Portable media players are suffering from a strategic change of focus, mainly driven by the increasing penetration of mobile phones, smart phones and portable multimedia players with increased memory, and music-enabled capabilities. COMPETITIVE LANDSCAPE New San, a local manufacturer present with several facilities in the southern province of Tierra del Fuego, managed to maintain the lead in portable media players in Argentina with a 30% share during 2010. The company manages its three main brands including Philco, Noblex, and Sanyo that follow mostly a volume pricing strategy. PROSPECTS Portable media players have added a new strength through the launch of E-readers and smaller and more dynamic portable MP3 players. The portable media players sector promises a constantly increasing development at a CAGR of 2% in volume terms, achieving demand of 635,000 units by 2015. CATEGORY DATA Table 78 Sales of Portable Media Players by Category: Volume 2005-2010 Table 79 Sales of Portable Media Players by Category: Value 2005-2010 Table 80 Sales of Portable Media Players by Category: % Volume Growth 2005-2010 Table 81 Sales of Portable Media Players by Category: % Value Growth 2005-2010


Table 82 Portable Media Players Company Shares 2006-2010 Table 83 Portable Media Players Brand Shares 2007-2010 Table 84 Sales of Portable Media Players by Distribution Format 2005-2010 Table 85 Forecast Sales of Portable Media Players by Category: Volume 2010-2015 Table 86 Forecast Sales of Portable Media Players by Category: Value 2010-2015 Table 87 Forecast Sales of Portable Media Players by Category: % Volume Growth 2010-2015 Table 88 Forecast Sales of Portable Media Players by Category: % Value Growth 2010-2015 Televisions and Projectors in Argentina - Category Analysis HEADLINES TRENDS Televisions have the highest penetration rates in the country among all consumer electronics with volume sales of 2.8 million units in 2010. This is a trend that has been historically maintained in the country, and is expected to continue throughout the forecast period as the most popular in-home electronic device in Argentinean culture. COMPETITIVE LANDSCAPE The move from Plasma and CCFL TVs to LED TVs allowed leading brands such as Samsung, Sony, Panasonic and LG to reinforce their market positions. Meanwhile Philips lost share in this category. Panasonic maintains the lead mainly sustained via analogue TVs, while Samsung made the largest jump through its push strategy by expanding its presence and product portfolio with both analogue and digital TVs at all major retailers, with locally produced and imported products. PROSPECTS Digital televisions, such as DVD and BD players, home cinema and speaker systems, are expected to register important expansion both in volume and constant value terms throughout the forecast period. Accessibility to digital technology is already strengthening competition between manufacturers, such as Samsung and Sony, launching 3D-enabled electronic products. In fact, Sony expects that from the total TV sales in 2011, more than 20% will appeal to the 3D segment. CATEGORY DATA Table 89 Sales of Televisions and Projectors by Category: Volume 2005-2010 Table 90 Sales of Televisions and Projectors by Category: Value 2005-2010 Table 91 Sales of Televisions and Projectors by Category: % Volume Growth 2005-2010 Table 92 Sales of Televisions and Projectors by Category: % Value Growth 2005-2010 Table 93 Sales of LCD TVs by Type 2009-2010 Table 94 Sales of Plasma TVs by Type 2009-2010 Table 95 Televisions and Projectors Company Shares 2006-2010 Table 96 Televisions and Projectors Brand Shares 2007-2010 Table 97 Sales of Televisions and Projectors by Distribution Format 2005-2010 Table 98 Forecast Sales of Televisions and Projectors by Category: Volume 2010-2015 Table 99 Forecast Sales of Televisions and Projectors by Category: Value 2010-2015 Table 100 Forecast Sales of Televisions and Projectors by Category: % Volume Growth 2010-2015 Table 101 Forecast Sales of Televisions and Projectors by Category: % Value Growth 2010-2015 Video Players in Argentina - Category Analysis HEADLINES


TRENDS Consumer demand for video players witnessed a strong development mainly driven by increasing replacement of traditional VCRs and aged DVD players since 2005, presenting accumulative growth of 154% in volume terms and 229% in value terms despite the decline in 2009. COMPETITIVE LANDSCAPE Philips managed to maintain the lead followed by Sony that has a solid traditional history in the category PROSPECTS The cost-effective DVD players are expected to continue driving demand for video recorder devices throughout the forecast period. However, market saturation already threatens DVD players which are expected to record negative growth rates in the medium and long term. CATEGORY DATA Table 102 Sales of Video Players by Category: Volume 2005-2010 Table 103 Sales of Video Players by Category: Value 2005-2010 Table 104 Sales of Video Players by Category: % Volume Growth 2005-2010 Table 105 Sales of Video Players by Category: % Value Growth 2005-2010 Table 106 Video Players Company Shares 2006-2010 Table 107 Video Players Brand Shares 2007-2010 Table 108 Sales of Video Players by Distribution Format 2005-2010 Table 109 Forecast Sales of Video Players by Category: Volume 2010-2015 Table 110 Forecast Sales of Video Players by Category: Value 2010-2015 Table 111 Forecast Sales of Video Players by Category: % Volume Growth 2010-2015 Table 112 Forecast Sales of Video Players by Category: % Value Growth 2010-2015 About Us: ReportsnReports is an online library of over 100,000+ market research reports and in-depth market research studies & analysis of over 5000 micro markets. We provide 24/7 online and offline support to our customers. Get in touch with us for your needs of market research reports. Follow us on Twitter: http://twitter.com/marketsreports Contact: Mr.Priyank 7557 Rambler road, Suite727,Dallas,TX75231 Tel: + 1 888 391 5441 E-mail: sales@reportsandreports.com http://www.reportsnreports.com Visit our Market Research Blog


Consumer Electronics in Argentina