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Philippine ICT market poised for rebound this year

Posted: 12 Mar 2010 ?? ?Print Version ?Bookmark and Share

Keywords:Philippines ICT? information and communications technology? wireless broadband? ICT market?

IDC's annual predictions of the information and communications technology (ICT) see 2010 as the "launch pad" for further recovery in the Philippine market.

The market firm estimates the total IT market spending in the Philippines to increase by 7.6 percent to reach $3.14 billion by the end of 2010, and would succeed in regaining a 9.1 percent CAGR by 2013. On the telecommunications front, spending is expected to record 7.7 percent growth in 2010, following the decline of 2.9 percent in year-end 2009. Telecommunications spending will increase and reach $3.81 billion.

The Philippine 2010 ICT market will see modest growth across various segments, driven by the transformation in business objectives, both from the vendor and service provider (SP) community and the end-user segments, be it corporate or small and medium enterprises (SMEs) and consumer. Older and more established strategies such as verticalization, will be given a new twist, together with revolutionized business models, regionalization, and convergence of services, all in the aim of capturing the ever-changing requirements from the end users.

"Overall, the ICT landscape in the Philippines will be driven by recovery of the ICT spending psyche and activities and transformation of key business objectives of the enterprise sector, as well as the consumers' ICT focus. Furthermore, the ever-evolving end user needs and objectives will impel vendors and SPs to re-examine key transformational strategies on marketing, consultative selling, and regionalization, as well as expansion and product and solution portfolio," says Jubert Daniel Alberto, manager for IT spending research at IDC Philippines.

The following are the Top 10 predictions that IDC believes will shape the ICT industry in the Philippines in 2010:

1. Modest IC spending growth
IDC expects that while full recovery will only happen in 2011, 2010 will provide the impetus for the ICT market to jumpstart the local ICT environment. Investment motives are anticipated to shift from initial cost savings to long-term savings and efficiency. Organizations are seen to prioritize investments that would minimize the total cost of ownership and look beyond the initial cost outlay.

Driving the growth in IT spending for 2010 is the hardware sector, comprising an estimated 72.2 percent of the total market, is projected to increase by 7 percent y-on-y, on the back of 6 percent recovery in total PC systems spending. Spending on packaged software is predicted to contribute 7.5 percent, while services spending will account for 20.3 percent, as enterprises seek more longer-term ICT initiatives. Key to the telecommunications growth is the continued high demand on and pervasiveness of mobile phone usage and mobile devices, as well as the accelerated adoption of mobile data and market competition through competitive pricing.

2. Wireless broadband boom
In 2010, the Philippine market will see the highest growth for wireless broadband, particularly USB dongle-based portable broadband operating on 3G/HSDPA technology, and will pose serious competition to fixed broadband, especially xDSL. IDC believes that the key elements for a surge in growth are in place. These include the price of devices, including USB dongles, laptops, and mini-notebooks, having reached acceptable levels for mass adoption.


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