IDC: Asian IT spending to pick up in mid-2002

Continuing weakening of the global economy and the September attacks on the US will push Asia's IT recovery back by six months to mid-2002, according to research released last week by market analyst International Data Corporation.

Continuing weakening of the global economy and the September attacks on the US will push Asia's IT recovery back by six months to mid-2002, according to research released last week by market analyst International Data Corporation (IDC).

Overall IT growth for 2001 in Asia-Pacific (excluding Japan) will be 1.3%, growing to 13.5% in 2002 and 22% in 2003, IDC predicts. The 2001 figures are being supported by China's continuing strong IT growth and because spending on IT services cannot easily be postponed, IDC says.

Companies will put off IT spending until they can sense a genuine turnaround in the global economy, but on the other hand, they cannot postpone projects or upgrades forever, IDC says in the report. IDC originally forecasted a pickup in IT spending early in 2002, but now expects spending to pick up in the middle of 2002, leading to a sales spike in 2003 to 2004.

The timing of the recovery will vary according to country and industry, according to IDC. In 2001, the worst-hit countries are South Korea, Australia, Taiwan and Hong Kong, all of which will see IT spending shrink this year. The hardware sector has been the hardest hit, with sharp declines in sales of PCs, servers, peripherals and workstations, IDC says.

Following the attacks on the US, disaster recovery services, security solutions and the enterprise storage market will receive a boost over the next 12 months, with data and application hosting services getting a new lease of life. Companies should take this opportunity to plan, reorganize and invest for the next year's recovery, IDC says.

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