"Russia Information Technology Report Q3 2013" now available at Fast Market Research

We made a downgrade to our medium-term forecast for the Russian IT market on the basis of weaker macroeconomic outlook. However, our forecast for Russian IT spending in 2013 is unchanged in the Q3 2013 update, as we maintain our view for 11.4% growth to reach RUB696.2bn. Key drivers of market expansion include availability of lower cost hardware - especially tablets - investments by enterprises in business software and modernisation of the public sector. Meanwhile, the market is also being boosted by Russia's historic entry into the WTO, finally confirmed in August 2012. WTO membership is expected to boost enterprise modernisation to achieve competitiveness, which will increase spending on hardware and business software applications.

Full Report Details at
- http://www.fastmr.com/prod/648382_russia_information_technology_report_q3_2013.aspx?afid=301

Headline Expenditure Projections

Computer Hardware Sales: RUB328.1bn in 2012 to RUB355.1bn in 2013, +8.2% in local currency terms. Mid-range notebooks and tablets are the key growth driver of retail spending, while, in the enterprise market, desktop sales will hold up.

Software Sales: RUB121.9bn in 2012 to RUB139.2bn in 2013, +14.3% in local currency terms. Modernisation initiatives of Russian enterprises as they become more integrated in global markets and supply chain will be a major driver of software spending.

IT Services Sales: RUB175.0bn in 2012 to RUB201.9bn in 2013, +15.4% in local currency terms. Cloud computing and value-added services such as consulting and applications development are seeing strong demand growth.

Risk/Reward Ratings: Russia's score is 53.5 out of 100.0 as it falls one position to seventh in the table. Russia is behind CEE peers Czech Republic and Poland, but ahead of Hungary and Turkey.

Key Trends & Developments

Russia's hardware market has not been immune from the shift occurring globally, and, in the first half of 2013, there have been reports of significant declines in desktop and notebook sales as tablets continue to increase as a share of sales. In addition to this global trend, the Russian hardware market is also impacted by the country's WTO entry, which should result in cuts in taxes on imports from the current level of around 5-15% of a product's added value. This comes as high-quality, low-priced tablets and slim-line laptops are becoming available from OEMs, particularly in China. The combination of lower import costs, cheaper mobile devices and the expansion of wireless networks (4G LTE will be nationwide by 2018) could usher in an era of rapid PC proliferation, particularly for personal rather than household devices.

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