Consumer electronics in argentina

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
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
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)
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.
After being the first brand to offer 3D TVs in Argentina and expanding the product portfolio to 3D Blu-
ray 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.
Hewlett Packard, Lenovo and Banghó 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.
The global leader Samsung manufactures in Tierra del Fuego associated with local companies there
such as Garbarino, Frávega, 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.
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.
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.
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.
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.
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

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