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IT boom expected in China, India

Asia's information technology industry outside of Japan will expand by 11 percent to US$88 billion next year as it begins a new growth cycle, a leading market-research house said yesterday.

China, India and South Korea will be the main drivers of the growth with consumer demand for digital gadgets in the home and office expected to boom across the region, IDC Asia-Pacific said.

The increasing number of Internet users will also fuel the growth, with 205 million people expected to be online across the Asia-Pacific next year, up 22 percent from 2003.

IDC managing director Piyush Singh said the global economic optimism in the late stages of this year had built a strong platform for IT growth in Asia.

"Key to our outlook is the positive economic news that has been emerging on several fronts and the fact that investment budgets for 2004 have been set in this relatively optimistic environment," Singh said in a report outlining next year's forecasts.

"The region's two largest developing economies, China and India, are charging forward on the economic front and driving overall regional IT market recovery," the report said.

The IDC report said the IT market in China would grow by 18 percent next year to be worth US$29.4 billion.

The Asian industry, excluding Japan, will expand to US$88 billion, meaning China's share of the market will be 35 percent.

India is expected to also contribute strongly to the regional expansion and grow by 19 percent, while South Korea will be the next best performer with 9 percent growth.

"These three countries together will account for 80 percent of the incremental regional market revenue in 2004 over the prior year," the report said.

The company's report and tallying of figures is based on an analysis of 500 technologies and services across the IT industry, including software, hardware and the Internet.

IDC described the rapid expansion of digital media as one of the most important structural changes in the IT industry and said competition in this sector would become increasingly fierce next year, giving consumers greater choice.

"As IT vendors such as HP, Dell, Microsoft and Gateway expand their breadth and depth of products and encroach into traditional consumer electronics markets dominated by the likes of Sony and Samsung, the battle for the digital home will heat up considerably," the report said.

Online advertising is also expected to surge next year with revenues from this sector expected to grow by 40 percent to reach US$637 million, according to the IDC report.

"In 2004, online advertising will begin to be referred to as a mainstream advertising channel in Asia's leading ad markets," it said.

IDC describes itself as the premier global market intelligence and advisory firm in the information technology and telecommunications industries.
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