Boston, MA -- (ReleaseWire) -- 03/11/2013 -- BMI View: Saudi IT spending is expected to reach US$4.2bn in 2013, up 3% in US dollar terms year-onyear, with BMI downwardly revising its forecast after the PC market slowed in H112. However, there were major IT projects by organisations including telecoms company Mobily and the justice department of the government. Saudi Arabia has the biggest IT market in the Gulf region and the kingdom will continue to be a lucrative market for technology products and services over the forecast period as it invests to upgrade its IT and communications infrastructure. The country's relative political stability for the region will also attract vendors.
Headline Expenditure Projections
Computer Hardware Sales: US$2.1bn in 2012 to US$2.2bn in 2013, +2% in US dollar terms. Forecast in US dollar terms downwardly revised owing to lower than expected PC sales growth in H112.
Software Sales: US$771mn in 2012 to US$807mn in 2013, +5% in US dollar terms. Forecast in US dollar terms unchanged, but software-as-a-service business models are expected to provide a growing opportunity for vendors.
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IT Services Sales: US$1.2bn in 2012 to US$1.3bn in 2013, +4% in US dollar terms. Forecast in US dollar terms unchanged, with increased spending on ICT infrastructure translating into long-term growth in IT services investment.
Risk/Reward Ratings (RRR): Saudi Arabia's score is 53.4 out of 100.0. Saudi Arabia remains in fifth place in our latest Middle East and Africa RRR table.
Key Trends & Developments
- Riyadh's 2012 budget has a heavy focus on capital investment to improve the country's transport, energy and social services infrastructure - and this should generate more opportunities for vendors of IT products and services. The next period promises to see more opportunities in sectors such as oil and gas, financial services, healthcare, education and communications.
- Youthful demographics and a growing population should drive demand as BMI predicts that the per capita IT spend will reach US$197 by 2017, with PC penetration rising to around 35%. We see the consumer PC segment holding up relatively well as public sector wages, social benefits and food and fuel subsidies have all been hiked substantially in the past year.
- Government-driven investments in transportation, property construction and water and power plants will drive opportunities for IT vendors. The government's five-year development plan focuses on infrastructure and aims to boost the role of the non-hydrocarbon private sector. Meanwhile, a major restructuring of the electricity market should also create opportunities for technology vendors.
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