IDC: China, India to drive Asia’s IT comeback in 2004

The IT market in Asia-Pacific (excluding Japan) will grow by 11 per cent in 2004 to US$88 billion, driven by strong growth in the region’s two biggest developing economies, China and India, according to research firm International Data Corp.

The IT market in China will grow 18 per cent next year to US$29.4 billion, 33 per cent of the overall regional IT spending, IDC said Monday in its predictions for next year. India’s IT market will grow 19 per cent next year, and together with South Korea’s expected nine per cent growth, these three countries will be responsible for 80 per cent of the IT market growth in Asia-Pacific, IDC said.

There will also be major structural changes in the Asia-Pacific IT market, with a move away from proprietary architectures and a new focus on business innovation. As users demand standards-based products, vendors will have to find new ways to differentiate their products without relying on proprietary barriers, IDC said.

The IT market is moving into a new growth phase, so 2004 will be a key year for defining the shape of the industry for the next few years, IDC said.

One of the hot areas in 2004 in Asia-Pacific will be storage, according to IDC. The total storage capacity deployed across the region will rise 54 per cent from 190,000TB to 300,000TB. This will create added demand for storage management software and services, a market expected to grow by 26 per cent next year, IDC said.

Other predictions for the Asia-Pacific IT market in 2004 include:

– economic liberalization is forcing small- and medium-sized businesses to streamline their operations, and this will become one of the most competitive markets for IT vendors

– consumers will continue to demand new digital media products, putting pressure on traditional consumer electronics firms

– IT suppliers will be under pressure to align their products and services with users’ demands to solve high-priority business problems, and some vendors will fail to make this transformation

– outsourcing to developing countries in Asia-Pacific will continue to grow strongly despite a public backlash in countries such as the U.S. Competitive pressures will force the private sector to adopt this kind of low-cost outsourcing sooner rather than later

– IP (Internet Protocol) telephony will finally gather momentum in the corporate sector in 2004 due to the cost savings and extra functionality now available

– wireless mobile services will make their mark in the corporate sector in 2004 as basic applications are complemented by location-based information services, multimedia messaging services and industry-specific applications

– online advertising will emerge as a major industry, with revenues expected to grow 40 per cent in 2004 to US$637 million. The online audience will continue to expand, with the total number of Internet users in the region growing by 22 per cent to 205 million

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