Economic Crisis Equals ITC Opportunities

By Greg McNevin

February 9, 2009: The analysts at IDC have released their top ten predictions for China’s information and communication technology market in 2009, dubbing the report “Crisis and Opportunity”.

The firm notes that as the U.S. financial crisis has spread worldwide since September 2008, China's economic growth dropped to 9.0 percent in Q3, 2008 from 10.6 percent and 10.1 percent in 1Q08 and 2Q08, respectively.

2009 is expected to be an extremely challenging year for both China's economy and China's IT market, and as such IDC has lowered its expectations for China's ICT market in 2009 from an initial US$74.63 billion to US$71.16 billion, with the growth rate down from 13.5 percent to 9.1 percent, while growth for the telecom service market remains the same.

That said, the Chinese government has launched an ambitious investment plan totalling over RMB4 trillion to cope with the economic challenges ahead, with the major investment period encompassing the end of 2008 and all of 2009. Because of this huge injection of funding, IDC expects similarly huge opportunities to be created for the ICT market.

Based on current circumstances, in 2009 IDC is predicting the following for China's ICT market:

• 1: The growth rate will fall back in 2009 under the impact of the global financial crisis, but will remain high compared to the rest of the world.
• 2: An era of ''software platformisation'' is dawning, and it is imperative that international and domestic service outsourcing be developed.
• 3: Growth in the SME IT market will slip, but there are still plenty of opportunities for three such SME sectors.
• 4. The transformation of channels and manufacturing is linked to the context of the crisis.
• 5. Telecom restructuring will provide powerful momentum for investment and create huge opportunities for equipment manufacturers.
• 6. The optimisation of IT resource management will create a ''Super Sunday'' for the construction of next-generation datacentres.
• 7. Diversified products enable an enhanced user experience and provide a powerful momentum to the consumer market.
• 8. Next-generation customer contact centres are increasing amidst the financial crisis.
• 9. Mobile Internet will become fully operational in 2009.
• 10. ''iTrust'' China-made — a governmental supervision and management system will be established in 2009, supported by information technology.

The full text of IDC’s predictions is available here.

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