Asia-Pacific still to boom, says IDC

The Asia-Pacific IT market is still growing, but only at half its previous rate, says analyst International Data Corporation (IDC).

The Asia-Pacific IT market is still growing, but only at half its previous rate, says analyst International Data Corporation (IDC).

However, future growth prospects are strong, with the market expected to more than double by 2005.

In 2000, the region (including Japan) grew by 16.4 % to $US178.5 billion, but this year, that will slow to 8.4% growth to $US193.4 billion it reveals.

IDC Asia-Pacific managing director Piyush Singh says the region has a $US70 billion IT spend; internet commerce is worth $US39 billion and wireless m-commerce worth $US100 million.

The Asia-Pacific also has 160 million cellphones, 75 million PCs installed and 90 million web users.

Singh says growth in IT is being hit by slowing economic activity across the region. Japan’s sluggish economy means its dominant share of the region is declining from 63% in 2000 to 60% this year.

Poorer economic performance in Australia-New Zealand also means declining shares for us (26% to 24% of the non-Japanese Asia-Pacific market).

But fast economic growth in Korea and Greater China means increasing shares for those countries, up from 17% to 18% and 35% to 38% respectively.

In the Asia-Pacific (excluding Japan), IDC says PCs took exactly a third of the market, IT services 23.9%, packaged software 11.2%, data communications gear 11% and servers 9.6%.

Datacom equipment showed the greatest growth from 2000-2001, of more than 30%. Software growth was 25%, IT services 22%, add-on storage about 17.5%, servers about 15% and PCs just 8%.

IDC says the current non-Japanese Asia-Pacific market will increase 17% a year from $US66.9 billion in 2002 to $US164.4 billion in 2005. The fastest growth will be in India, averaging 27.4% annual growth, and Greater China, with 21.2% annual growth. Australia-New Zealand is tipped to grow 9.7% in the period.

In terms of total IT spend, China will increasingly show its dominance, growing from $US16 billion in 2000 to almost $US50 billion in 2005. Australia comes next, growing from around $US14 billion to $US24 billion, followed by India (which is about to overtake currently third-placed Taiwan).

Investment in e-business will continue, with “bricks and mortar firms picking up the slack".

E-commerce will continue to scale new heights, leaping from about $US20 billion revenue in 2000 to more than $US300 billion in 2005.

Asia’s wireless web market will take shape, says Singh, and grow from four million mobile internet users in 2000 to 142 million in 2005. M-commerce revenue will consequently rise from virtually nothing in 2000 to almost $US10 billion in the non-Japanese Asia-Pacific by 2005. Mobile phone users will more than double from 120 million to around 300 million over the same period.

CRM and internet security applications will drive technology investments from around $US350 million in 2000 to around $US1200 million in 2005. "Internet security solutions will be hot,” says Singh.

He told an audience at the annual IDC Directions roadshow in Auckland: “To stand still, you need to keep running. Value-added services will become more important due to intense competitive pressure. Companies need to focus on integrating the internet, which will be critical for business over the next 10 to 15 years."

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