ICT magazine

IT market revenue in Bosnia and Herzegovina grew a modest 5.1% in 2006 to $130 million. According to a new IDC study, the slow growth was largely due to a banner year in 2005, the year preceding the introduction of the VAT, which set a high baseline. IT procurement in the government also stagnated, due to the elections held in October 2006. This year, a combination of factors ranging from dynamic economy, privatization, restructuring, rising households incomes, and global IT vendors opening offices will drive the IT market forward, and IDC expects revenue to jump by more than 12% by the end of the year.

“Despite the growth, Bosnia and Herzegovina still face a number of challenges that will affect IT investments,” says Boris Zitnik, Managing Director, IDC Adriatics. “Although GDP growth has settled at around 6% annually, political obstacles and a lack of clear strategy are dampening government IT procurements. And the state, as the largest single investor in IT in the country, should be the main driver at this stage of market maturity. Also, unemployment is still far too high and the current account deficit are real problems. Nevertheless, the VAT has turned into a predictable and solid source of revenue for the government, Internet and broadband penetration are on the rise, and consumers are snapping up PCs for both home and business use.”

Hardware accounts for more than two-thirds of the market and will continue to do so for the next few years. As this is a relatively young market, government and business are still installing infrastructure and rolling out PCs to desk workers. IT services accounts for just under 21% and software for more than 11%.

Personal computing is the largest single segment IT segment, representing nearly 39% of IT market value in Bosnia and Herzegovina in 2006 and expected to do so again in 2007. Local assemblers IT Computers and NTCHS dominate the desktop segment while a slew of international vendors control the notebook segment.

“Although Bosnia and Herzegovina is still relatively immature as a market, demand for desktops has leveled off as users have discovered the benefits of portability,” says Zitnik. “With the notebook market more or less evenly divided between the top five players, we can expect competition to heat up as they all vie for increased market share.”

IDC expect IT spending in Bosnia and Herzegovina to grow dynamically in the mid-term. “But a lot still depends on how the political constraints facing the country are dealt with,” says Zitnik. “In addition to a resurgence of populist spending – which could undercut government IT budgets – sound macroeconomic policies are still not in place, and the foundations for sustained private-sector growth have yet to be laid.”

IDC’s Bosnia and Herzegovina IT Market 2007-2011 Forecast and 2006 Vendor Shares presents the IT market in Bosnia and Herzegovina and forecasts total IT expenditure by technology through 2011. The study contains market size, vendor market shares, and growth projections for hardware and packaged software shipments, and IT services provision. The study answers the following questions: What are IDC’s predictions for IT spending in Bosnia and Herzegovina, and what are the assumptions behind the forecast? What are the new trends in the hardware, packaged software, and IT services segments? Who are the market leaders based on revenue?