Armenia Aspires to Become Tech Industry Hub

Two men examin ArmTabs, the first Armenian tablet computers in production


YEREVAN (Agence France-Presse)—Once seen as a Silicon Valley of the Soviet Union, the tiny Caucasus nation of Armenia is hoping the launch of its first tablet computer and smartphone could kickstart a comeback for the country’s tech sector.

Designed — and soon set to be constructed — in Armenia, the ArmPhone and ArmTab devices are seen as a key steppingstone as the landlocked state seeks to overcome crippling trade blockades from its neighbors to become an industry hub.

“The high-tech sector in Armenia already has a long existence and now we need to take it back to an international level,” Vahan Chakarian, president of the joint Armenian-US company Minno behind the project, told AFP.

“By building an Armenian tablet computer we’ll create a brand that will make Armenia more recognizable on the world market,” Chakarian said.

Compared to major international brands funding and production targets for the start-up are modest. The firm is spending some $6.5 million over its first three years and aims to get manufacturing levels up to some 100,000 items annually.

While the devices are designed by Armenian experts, up until now production has been taking place in Hong Kong and the US. But those behind the project hope that will change soon.

“We’ve been spending a lot of funds sending our Armenian specialists to China to conduct quality tests where the tablets were being assembled,” Chakarian said.

“Given the engineering capabilities in Armenia we plan in the near future that all the work on the exterior and motherboard design and software implementation will take place exclusively in Armenia.”

The company already has a contract with Armenia’s education ministry to supply all first graders in the country with a tablet computer by 2015.

Strong heritage, unfriendly neighbors
For many the resurgence of the high-tech sector in Armenia comes as no surprise. From computer systems in space ships to the electronics in submarines, Armenia was at the heart of the USSR technology sector.

“One third of military electronics was designed and produced in Armenia and there were several hundred thousand specialists worked on developing and manufacturing computer technology,” says Karen Vardanyan, executive director at the Union of Information Technology Enterprises in Yerevan.

Armenia though faces considerable challenges if it is to compete on the international level.

Festering disputes with its two neighbours Turkey and Azerbaijan — including over the disputed territory of Nagorny Karabakh — mean that much of its borders are sealed off.

Those in the IT sector remain bullish about the prospects for development and point to steady growth rates of over 20 percent despite Armenia’s flagging overall economic performance.

“Our predictions show that by 2018 the IT sphere will become the dominant sector in the country’s economy and will bring in around $1 billion,” said Vardanyan.

Huge intellectual potential
Some 500 tech firms are now working in the country and international giants such as Microsoft have started getting involved.

“Our main task today is to maintain the current growth rates, increase the number of specialists and then make sure they have well paid work to stop them being attracted abroad,” Vardanyan said.

For its part Armenia’s government has thrown its weight behind the industry by making it a priority economic sector and pledging that more help is on the way.

“At this stage we have accumulated a huge potential for development, but to move forward, we need to think and take new measures to help new companies compete,” Prime Minister Tigran Sarkisian said at a recent unveiling ceremony for the ArmTab and ArmPhone.

“Now the government is preparing amendments to the legislation that will mitigate tax conditions for Start-up companies,” Sarkisian said.

Despite the challenges, all this leaves those at the forefront sector optimistic for the future.

“In Armenia there is a huge intellectual potential and favourable legislation that can help develop this sphere,” says tablet producer Chakharian.

“I am sure that in the next three to five years Armenia will become famous for its IT production and the ArmTab and ArmPhone will be the start of this.”

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7 Comments

  1. Vindicated Man said:

    I think it’s the right industry: The country got talented engineers and other technical people. In this sector, you don’t depend on hydrocarbons, or have to rely too heavily on an access to the ocean. What you are selling is the product of human intellect (like software/hardware developments). Armenia has historically had plenty of brain-power, and this has always set it aside from many others in the region.

  2. H. Boghossian said:

    Let’s hope Russia’s further isolation does not affect us too.

    • Sarkis said:

      Absolutely baseless lies. Russia is not “isolating” Armenia, it is opening the door for Armenia to enter the developing Asian and Eastern European markets. The only isolation Armenia has faced is the 23 year old Turkish-EU-NATO-Azeri blockade of Armenia which we have managed to survive thanks to our allies Russia and Iran.

  3. Armenian said:

    Sounds promising, and I hope Armenia can utilize its smarts and build a strong economy by giving bright youngsters a reason to stay in their country and help build its future, but as far as breaking into the world market goes, I’m not sure how we can export those devices and other devices like that one onto the international market especially since now we’ve completely tossed our potential trade relations with the EU and Ukraine down the drain and lost access to a market of 500 million people virtually overnight. We are going to become increasingly isolated in the next few years…

    • Sarkis said:

      Again “Armenian” posts a disgusting comment trying to blame on the Armenian government the fact that the EU categorically refused to negotiate a trade agreement with Armenia after Armenia rightly chose to join the Customs Union. Armenia did not “toss” anything away, it very diplomatically announced it was still willing to work for closer economic ties with the EU the day after Armenia joined the Customs Union. The EU proved that the association agreement it was offering was political in nature, not economic.

      The worthless EU governments have bankrupted their citizens with austerity, extreme taxes and outright wealth confiscation. A 500 million person market is worthless if they can’t even afford to pay for bread and water.

      And what’s all this nonsense about not trading with Ukraine. The idiot Neonazis in Ukraine have guaranteed that the country will default on its loans within a few weeks. That’s what happens when you let degenerate racist Russophobes destroy your country.

      Please stop posting lies here and get some help. Or even better, please take the plunge, move to Armenia, and try enlightening the peasantry over there. I’m sure your racism and hatred for the Armenian state and government will received an appropriate response there.

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