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2002 down on the books as worst year for IT
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Thursday, November 21, 2002
In a teleconference to its global clients today, IDC said that the worldwide IT industry suffered its worst year ever in 2002, with a growth rate of negative 2.3 percent. But the market researcher says it will get better in 2003, forecasting a growth rate of more than 5 percent.
"Overall, the IT industry has contracted by roughly 3 percent over the past two years," said John Gantz, chief research officer at IDC, in a statement. "This is in sharp contrast to the average annual growth rate of 12 percent enjoyed by the industry over the past 20 years. Looking forward to 2003, we expect to see spending on IT and communications resume, driving a worldwide growth rate of 5.8 percent for the industry."
The industry's lead weights in this year's decline include a 9.3 percent reduction in the worldwide systems market, comprised of PCs, servers and workstations. The worldwide storage market was also dragged down 10.6 percent in 2002 and is not expected to recover to its 2001 size until after 2006. Meanwhile, the worldwide network equipment market fell 7.6 percent as sales to telecoms dropped sharply. And the services market, which today represents more than one-third of total worldwide IT revenues, also sank as the average contract value fell to a three year low, IDC reported.
While IDC said IT spending will resume growth in 2003, it noted changes in the economic or geopolitical environment, such as a prolonged war in Iraq or another plunge in the stock market, which could constrict growth.
Because of the possibility that these more negative external conditions might be realized, IDC produced for the first time an alternate downside forecast. Under these more negative conditions, the market researcher believes worldwide IT spending growth next year would be closer to 2 percent, with spending in future years approximating real GDP growth.
Using its more favorable assumptions, IDC expects IT spending in the U.S. to grow 4.4 percent in 2003, led by renewed demand for servers, security and network equipment. Storage and software will see more robust growth starting in 2005, while PC revenues will resume their decline after 2004.
Europe is not expected to match economic growth in the U.S. over the next several years, but IT spending will grow 5.4 percent next year, followed by several more years of solid gains. Japan will mirror the U.S. while the rest of Asia/Pacific will experience more substantial gains through the forecast period, IDC said. And, after a very difficult 2002, Latin America will see 8.7 percent growth in 2003 and double-digit growth through 2006.
"Although the industry as a whole won't return to the kind of growth enjoyed before the downturn, there will be a number of bright spots over the next several years," said Stephen Minton, IDC's director of worldwide IT markets and strategies, in a statement. "Innovation and value will be important drivers that lead the industry back to health."
By: DocMemory
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