ICT market in APAC to grow by 11% in 2003

BANGALORE: Research firm IDC expects a cautious gradual IT market recovery to take place in the Asia/Pacific region (excluding Japan) in 2003, driven by infrastructure upgrades.

The IDC Asia/Pacific, Managing Director, Piyush Singh said, "The market is expected to grow by 11 percent over the prior year, in constant US dollar terms, and will be worth $81 Billion in 2003. "

According to IDC, hardware segments such as PCs, low and mid-range servers, and LAN hardware are expected to rebound compared to their weak performance in 2002. Converged hand-held access devices and Networked Attached Storage will grow rapidly in 2003. Digital imaging and printing will also have a stellar year as digital cameras and digital photography become mainstream. Wireless LANs will gain significant traction in enterprises and location-specific public ‘hotspots’ will mushroom in the region.

Growth in software will be driven via modular implementation and by software that simplifies operations. Resource optimization, virtualization, and the need for enhanced security/business continuity will also drive market growth. Linux adoption will increase and Linux clusters will also compete with Unix in the high-performance computing space. The slow and steady transformation towards a services oriented IT market structure will continue. The focus will be more on smaller projects in 2003. The top Indian services companies will ride the wave of ‘cost-cutting’ and will emerge on the global scene to challenge the incumbents.

"The telecommunications services industry in the region will continue its growth momentum driven by deregulation and pent-up demand in the developing countries. This market will grow by 11 percent over the prior year to $137 billion. VOIP services will gain traction and will be seriously evaluated by organizations in 2003" said Singh. "Broadband will continue to proliferate, driven by lower prices, competition and the exploding on-line gaming phenomenon in the region", he added.

Looking beyond 2003, Singh said, "The industry will enter a new decade of growth driven by personal intelligent gadgets, pervasive connectivity, mobility, seamless information exchange and bio-informatics". "The average ICT market growth in the next decade will be lower than the average market growth experienced in the last decade. The ICT industry will have to adapt its expectations to this new reality", he cautioned.

In addition, IDC expects a number of significant milestones to be passed over the course of the next 12 months. By the end of the year, there will be more than 100 million PCs and 400 million cellular phones installed in the Asia/Pacific region, outside of Japan. There will be more than 165 million Internet users and 25 million mobile Internet users in the region by the end of 2003.

The company’s top 10 predictions for the Information and Communications Technology (ICT) market in the Asia/Pacific region are:

• Asia/Pacific (excluding Japan) IT market will recover gradually in 2003 and will grow by 11 percent to $81 billion, driven by infrastructure upgrades.



• Asia/Pacific (excluding Japan) telecommunications services market will grow by 11 percent in 2003 to $137 billion, despite the global meltdown in this sector.



• Wireless LANs will gain traction. Continued demand from the enterprise segment as well as proliferation of 'hotspots' will drive growth in the coming year.



• Top Indian services companies such as TCS, Infosys, Wipro and Satyam Computer Services will emerge as key global players, riding on the global wave of "cost cutting".



• Network Storage market in the region will cross the $1 billion threshold.



• Linux will gain acceptance in enterprises and will eat into the space dominated by Unix.



• Online gaming will emerge as a killer application that will drive demand for broadband services in the region.



• The converged handheld devices market (merger of the handset and the PDA) will witness mass emergence and adoption in the region and will grow by 88 percent in terms of shipments, over the prior year.



• By the end of the year, digital images captured per day by scanners, cameras, and devices will surpass the number of images captured on film, but the industry will still center on film.



• Focus on Business Continuity and Security Solutions will escalate given the threat of terrorism, viruses and cyber-terrorism.

 

Item

IT Spending

Internet Commerce

Telecom Services revenue

Cell Phones Installed

PCs installed

Internet users

Mobile Internet Users

Source: IDC, 2002

IDC’s Asia/Pacific Predictions 2003 are based on input and review from analysts across the world and are distilled by regional research heads. In addition, IDC surveyed nearly 1000 IT and business executives worldwide about their IT spending expectations for 2003 as part of its annual Project Barometer. This information is collected and used to create and refine IDC’s vision for the coming year.