Argentina’s Booming Mobility

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August 19, 2012 by Dan Swinhoe

Following our focus on mobility in Brazil, it’s now Argentina’s turn. Although not as big as its Brazilian neighbor, the South American country is fully embracing the smart device revolution.

According to Budde, ‘Argentina has one of the most solid state-of-the-art telecom infrastructures in Latin America.’ This could by why percentage-wise it fares better than Brazil in many facets of mobility. Like many areas of Latin America the total mobile phone penetration is incredibly high. Growing by around 6% annually, the figure is predicted to reach 144% by the end of the year, though it also has high numbers of multiple SIM cards/subscriptions per person. In total Argentina accounts for around 9% of the regional connections, behind Brazil (38%) and Mexico (16%). As of March, 2.1% of internet traffic came from non-computer-devices, 70.4% of that belonged to mobile phones while tablets accounted for 25.2%.

Less is More

While in sheer number Brazil owns more smartphones, by penetration Argentina has a far bigger market. 24% of people in the country (compared to Brazil’s 15%) own a smartphone, totaling around 10 million devices. Of the 13.7 million phones sold last year, 24% were smartphones, and the numbers are bound to get even bigger. Sales of the devices grew by a whopping 398% in the first quarter of this year compared to the same period last year. Android is by far the most popular OS, taking around 50% of the market, compared to Apple’s 10%.

Despite this rise in numbers, costs still remain prohibitive in the country. Argentina is currently the third largest mobile broadband market, with 55 million total subscriptions. Despite high costs, these look set to fall in the next few years. Smartphone prices remain high (around $250 dollars) preventing wider adoption, but hopefully as more are sold and cheaper local devices are rolled out prices will fall. Inflation and government protectionism haven’t yet banned sales of imported smartphones (despite an April Fool’s story widely reported), but do make it difficult andexpensive in an attempt to increase local production.

Google recently conducted research into different countries’ relationships with their smartphones. In South America they focused on Argentina and Brazil, and produced some interesting results. 20% more of Argentinian smartphone users use their devices for emailing, social networking and search engines, yet the same proportion use them for videos. Argentinians also have a slightly higher interest in apps, though still far less than countries such as Japan and the US. Both countries are equally likely to use their smartphones for local information and researching purchases then purchase products (more so than the US).

Tablets & e-Commerce

As well as a growing hunger for smartphones, portable computing devices are quickly becoming popular. 63% of computers sold last year were either notebooks, netbooks or tablets. While Columbia has the highest tablet penetration rate in the region (and one of the highest in the world), Argentina’s 12% is still high. There were an estimated 225,000 tablets sold last year, with the iPad dominating the market.

As the number of smart devices rise, the impact of e-commerce could be massive in years to come. 29.5% of Argentina’s Internet users engage in e-commerce, equaling around 9 million shoppers, and according to the Argentine Chamber of E-Commerce, the total value of e-commerce sales in 2011 was 11.5 billion pesos ($2.6 million), an increase of 49.5% on the year before. By the end of this year the figure is likely to grow another 41% to $3.5 million.

There are many promising signs that mobility is taking off in Argentina. Its well developed infrastructure, increasing sales and acceptance of e-commerce all point to a mobile future. But tackling its inflation and importing problems may take time be barriers.

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