Boston, MA -- (ReleaseWire) -- 11/07/2013 -- The continued strong performance of the UAE economy, as reflected by relatively high business confidence, rising real estate prices and growth of the tourism sector, will sustain demand for IT products and services. Although the government, through the implementation of various smart city and e-governance projects, will remain the IT spending segment, we highlight the growing opportunities in the consumer segment in the form of mobility solutions that can take advantage of the high smartphone and tablet penetration in the country.
Headline Expenditure Projections
Computer Hardware Sales: AED7.59bn in 2012 to AED8.16bn in 2013, +7.5% in local currency terms. PC market recovered in H212, and we expect growth to be driven higher in 2013 due to demand for tablets, hybrids and ultrabooks.
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Software Sales: AED2.58bn in 2012 to AED2.85bn in 2013, +10.3% in local currency terms. Upgrades to Microsoft's Windows 8 OS will boost spending in 2013, while the UAE is also one of the region's fastest growing enterprise resource planning (ERP) markets.
IT Services Sales: AED4.26bn in 2012 to AED4.74bn in 2013, +11.3% in local currency terms. Managed services will be a leading growth area, with growth of cloud computing and real-time analytics accelerating.
Risk/Reward Ratings: The UAE remained in third position in our latest regional RRR table with a score of 65.4 out of 100.0. The country is behind Qatar and Israel, and scores above the regional average on all four categories of our ratings table.
Key Trends & Developments
The Telecommunications Regulatory Authority (TRA) of the UAE has established a framework for licensing and regulation of certification service providers (CSP) operating in the country. This development has the potential to drive growth in the UAE's e-commerce market by boosting consumer confidence in the safety and security of electronic transactions. The UAE already leads the region's e-commerce market, with total transactions of around US$2bn in 2010, according to report by global electronic payments firm VISA.
This was equivalent to around 60% of total e-commerce transactions in the GCC during that period. BMI believes that concern over the safety and security of electronic transactions is a major impediment to the growth of e-commerce services in most countries in the region. Presently, there are three CSPs providing electronic attestation services to the public for electronic transactions in the UAE. These are Etisalat, Al- Hilal Bank and Global Information Technology (GIT). All three firms and any new licensee will be subject to the guidelines published by the TRA.
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