Research firm cuts IT sales forecast for region

Dubai: IDC has made dramatic changes to its forecast for the overall IT market, especially the hardware sector, which is the worst-hit segment.

"In the past five years, the Gulf region had tremendous growth in PC market. In certain markets PCs were growing more than 100 per cent year-on-year in terms of notebooks adoption. The key trends in the past few years were vendors were very aggressive and companies replacing desktops with notebooks and a very strong consumer demand due to the strong intake by SMBs," said Omar Shihab, Research Manager, PCs and Systems, IDC Middle East and Africa.

He said that in the past five years, companies were investing heavily on building hardware infrastructure. Now we see them shifting. We are not going to see the same growth in hardware infrastructure like before in the next five years. Once we get out of this dip, the next wave of adoption will be to maximise the utilisation of the infrastructure. It is where we can see virtualisation and software-as-a-service becoming important over the next five years. More focus will be on return of investment. More CEOs and companies will try to maximise their investment on hardware.

"We are going to see a total change in landscape. For consumers, there will still be growth in notebooks. Things are not going to in the same direction as previously thought," Shihab said.

"The real issue will be once the summer season starts as Ramadan is also tied to it. The demand will be much slower in the second quarter compared to first quarter. The demand is expected to peak in the fourth quarter as consumers, companies will have a better view of the market. Full signs of recovery will happen by year-end and a rebound in growth will start in 2010," he said.

Shihab said certain markets in the Gulf are still going ahead with infrastructure roll outs in education and healthcare segments. But the volumes are going to be less.

"In the second quarter, notebooks are projected to decline by seven per cent. The growth in notebooks in the first quarter was part due to the implementation of the projects in fourth quarter of 2008. So in the second quarter, we are going to see a slowdown as there is no major projects taking place," said Swapna Subramani, associate research analyst, MEA region, IDC

''For the full year, [the] overall PC market is projected to fall by five per cent while [the] desktop market is projected to fall by 15 per cent and notebook market by two per cent."

He said 3.94 million units are forecast to be shipped into the region in 2009 compared to 4.14 million units last year. Next year 4.4 million PC units are expected. By 2013, 7.42 million units are projected to be shipped. During this period, the total value of the PC market will stand at $3.26 billion this year rising to $3.60 billion in 2010 and $5.75 billion by 2013.