Uruguay - IT-Computer Hardware Uruguay - IT-Computer Hardware
Overview
| 2016 | 2017 | 2018 | |
| Total Market Size | n/a | n/a | n/a |
| Total Local Production | n/a | n/a | n/a |
| Total Exports | 0 | 0 | 0 |
| Total Imports | 124 | 116 | 136 |
| Imports from the U.S. | 32 | 32 | 30 |
| Source: Transaction database—USD million Products under HS codes 8471 and 8473 | |||
Due to educational programs, increased Internet access, and continuing modernization of both the private and public sectors, imports of information technology (IT) hardware and accessories increased in 2018. From 2017 to 2018, the market share of U.S. computer hardware imports decreased from 27 to 22 percent. China had almost 60 percent of market share in computer hardware in 2018.
Distributors of hardware normally sell both equipment assembled abroad and products assembled locally using imported components and parts. Imports of hardware are handled mainly by distributors. Brands such as Apple, Dell, HP, iView, Lenovo, Samsung, and Sony, among others, are easily found. Data about market share by brand is not available, but buyers have become very price conscious. Pricing and financing are key factors for buyers when deciding which brand to purchase.
Uruguay has one of South America’s highest literacy rates (over 98 percent), the telecommunications network is 100 percent digital, and the Internet penetration rate is one of the highest in Latin America (88 percent). Since Uruguay does not manufacture computer hardware, further growth in Internet usage is expected to generate greater demand for computer imports.
Multinationals consider Uruguay an excellent IT hub for back office, data, and call centers. Companies such as RCI, Amazon, Microsoft, Sabre, and PWC are among the many that have set up operations in Uruguay. Following a 50-million-dollar investment, in 2016 the state-owned telecommunications company Antel inaugurated its tier III data center, one of five in Latin America (http://www.antel.com.uy/datacenter). Note: Data centers fall into one of four tiers, the fourth being the best. Tier III guarantees 99.982 percent uptime, no more than 1/6 hours of downtime per year, and N + 1 redundancy.
There are no tariffs for items from MERCOSUR; for third countries, the Common External Tariff (CET) ranges from zero to 16 percent. However, information technology and telecommunications components fall under a special regime until 2019—the majority of items under HS codes 84.71 have zero to two percent CET, and most items under 84.73 are exempt from import tariffs.
Leading Sub-Sectors
Traditionally hardware and accessories were among the top imports from the United States. While total imports have dropped, local clients still prefer U.S. distributors. Items under HS code 8471 such as CPUs, monitors, magnetic discs, printers, ATM equipment, hubs, network, and digital equipment are key imports. For items under HS code 8473, the key items are boards, memory cards, ink cartridges, parts and accessories, discs, and magnetic heads, among others. Due to low-cost imports from third markets, U.S. exporters must be able to offer competitive prices. Many U.S. multinationals ship from Asia directly.
Opportunities
The Uruguayan government made the “one laptop per child” program a top priority (locally known as Plan Ceibal). Sector analysts estimate that imports of hardware will continue to increase since a computer will likely be considered a basic necessity. Local IT businesses are confident that demand for equipment and qualified workers will continue to rise over the next few years. Refurbished equipment is readily accepted by consumers, particularly for first time users. The current government administration also supplies tablets to all retirees as part of Plan Ceibal program and will require health institutions to transition to having only electronic medical records, further increasing the need for IT updates.
Web Resources
Embassy Contact: Office.Montevideo@trade.gov http://www.export.gov/uruguay
Uruguayan IT Chamber: http://www.cuti.org.uy