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Tech spending to grow in 2003 - UBS Warburg

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CIOL Bureau
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NEW YORK: Companies will spend their 2003 technology dollars on networking gear and systems to store data but handheld computers and wireless gadgets will fall by the wayside, a survey of global tech buyers revealed.



The study, by Wall Street brokerage firm UBS Warburg, also found that businesses intend to spend more on tech products this year than they did in 2002, going against a recent survey by rival Goldman Sachs that showed a spending decline. UBS Warburg questioned 85 Chief Information Officers, who hold the technology purse strings of global corporations, during the month of December.



According to the survey, the CIO's expect tech spending to grow 4 percent in 2003 over 2002, with spending on storage products and networking equipment topping the bill. Software spending is anticipated to outpace hardware spending while handheld computers, wireless devices -- such as smartphones -- and technology services are seen as the weakest categories.



Microsoft Corp, the world's largest software maker, and hardware and services companies IBM Corp., Dell Corp. and Hewlett-Packard Co are among the firms expected to benefit most from the spending uptick, the survey said. But handheld computer maker Palm Inc. and Oracle Corp., the world's second largest software company, are likely to receive less in 2003 versus 2002.



The results are in contrast to a recent CIO survey from rival investment brokerage firm Goldman Sachs which forecast a 1 percent decline in spending in 2003, compared with a previous outlook for growth of 2 percent to 3 percent. Goldman said the survey's outlook for long-term growth also dropped to an all-time low of about 5 percent, down from a previous range of 6 percent to 7 percent.



The UBS Warburg survey showed a long-term growth rate of 6 percent. In addition, UBS said 40 percent of CIOs questioned indicated their spending had already returned to normal rates while 22 percent said they expected a return to normal patterns some time this year. Some 28 percent said they did not think they would return to normal spending until 2004 or later.



Personal computer spending will be relatively weak in 2003, with CIOs planning to replace just 21 percent of their existing machines, UBS said. "Expectations for a return in corporate PC demand and big upside do not appear reasonable," the brokerage firm added.



© Reuters

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