ALKHOBAR, 18 January 2005 — With this the last day for private companies in the Kingdom to be open before the Eid Al-Adha holiday, it seems to be a good time to look at what 2005 will hold for IT, the industry and its use, in the coming months.
No matter how the numbers are juggled, this year mobility and China appear to be the big winners but hardware vendors might find the going getting tough.
The researchers at IDC believe that commercial growth in the PC sector will slow in 2005 as the recent recovery matures, but should remain at a relatively robust 11.3 percent vs. projected consumer growth of only 8 percent. Total shipments are expected to reach 195.1 million in 2005 on growth of 10.1 percent, with total shipment value growing by 3.9 percent to $201 billion.
“We’ve expected the market to slow from peak recovery in 2004, since mid-2001,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “However, despite the relatively weak consumer market, commercial and portable demand continue to drive growth.”
Following this year’s “tech resurrection,” with a return to positive IT spending growth, IDC is predicting a “tech realignment” in 2005. According to Frank Gens, senior vice president of Research at IDC, “Beneath the surface of an almost boringly moderate growth rate of six percent, 2005 will be a year of enormous turbulence in the IT market with lots of consolidation and realignment in many sectors.”
IDC’s outlook for the year ahead includes:
Moderate worldwide growth in IT spending will keep the pressure on IT suppliers to cut costs, target better-than-average-growth customer segments and deliver higher-value solutions. IDC’s prediction of six percent global growth in this sector assumes improving IT growth in the US, modest improvement in western Europe, strong growth in the emerging IT economies of Central and Eastern Europe, China and India and growth struggles in Japan and Latin America. Of these assumptions, IDC feels European recovery has the greatest downside risk.
In the enterprise, businesses’ migration to a dynamic IT environment — with greater IT efficiency and better business-responsiveness — will continue to drive IT investment in the following major segments:
In the hardware side of the enterprise IT market, commoditization, with downward pricing pressure, will continue to squeeze suppliers. The growing acceptance of blade servers will put additional downward pressure on the overall server market while low-cost, high-capacity drives will bring about further price erosion in the storage market. Meanwhile, IDC predicts that the semiconductor market will experience a correction in the first half of 2005, followed by a modest recovery.
In the infrastructure software world, IDC notes that systems vendors like IBM, HP, Sun and EMC will continue to buy up companies, large and small, to fill out their software portfolios and create a complete dynamic infrastructure platform. Likewise, independent infrastructure software players like Microsoft, CA and Novell will spend 2005 expanding their offerings through mergers, acquisitions and alliances.
In the $100 billion application market, IDC has concluded that it will become clearer that competition is moving away from developing “the killer app.” Instead, applications software vendors will continue jockeying to define and own “the killer application platform.”
In the IT/Business Services sector, IDC expects “offshoring” to increase across a number of areas, as the industry races to lower its cost structure and improve its efficiency. At the same time, emphasis on offering greater business value to customers will produce a renewed focus on business process outsourcing.
In 2005 IDC is predicting that the consumer space will continue to be dominated by the latest digital devices, with new handheld game consoles, hard-disk drive MP3 players and digital cameras leading the market. Broadband adoption will also make further gains as price points fall further.
An important development in 2005 will be China’s takeover of the Internet. E-agency, an interactive marketing communications firm, anticipates that this will be the year that the number of Internet users worldwide tops one billion — led by China. They expect that the number of web searches will pass five billion per week and the Internet will be used more than ever. E-agency also believes that 2005 will be the year that the couch potatoes beat the geeks, as the control centers of home networks move into the comfort of the living room. The firm also notes that much of that wondrous new digital high-tech equipment will be made — in China.
In an increasingly online world E-agency believes that branding will be the corporate buzzword of 2005. Look for mainstream businesses to develop their own blogs. As broadband adoption increases, consumers will make the movie download commonplace. Wireless networks will be everywhere. Good photography will lead the way in making websites more attractive. “TV” commercials will begin appearing on major websites by year end and, as they become more complex, more websites will add search tools.
E-agency suggests that the New Year will bring changes in how we communicate, where we get our information and how companies reach their targeted audiences. Much of this will be due to smarter technology, but some of these changes will be due to a new generation of smarter users.
With wireless networks and mobility all the rage in 2005, Intel has put forward a few resolutions to help consumers take advantage of the trend.
1. Mobilize Your Home Entertainment: Tomorrow, Intel will launch the Sonoma platform, enabling mobile entertainment PCs that support accelerated graphics for superb DVD playback and gaming, theater-quality sound for MP3s and TV tuner ExpressCards that will be available soon.
2. Take Your Laptop on Vacation: Your notebook also enables you to stay in touch, store and send digital photos, replace weighty travel guides and maintain photographic travelogues on your family’s website. A great wireless destination is the Dubai Jazz Festival, Feb. 2-4, where you can listen to world class jazz music while surfing the web or sharing photos with your loved ones around the world from Intel’s hospitality tent at the event.
3. Battle Bulk: Dieting may be the most common New Year’s resolution, but the truly trendy also will resolve to shed notebook bulk with a slimmer model.
4. Stay in Visual Touch: Cameras for videoconferencing are now available for notebooks, enabling videoconferencing with friends and family from more than 56,000 Intel Centrino mobile technology-verified wireless hotspots worldwide.
5. Work Smarter, Not Longer: Whether you are flying across the planet or waiting at a football practice, laptop mobility enables you to fit work into slices of time that otherwise would go unused, freeing time later for other important activities.
6. Get Smarter, Have Fun: Notebooks are becoming mobile backpacks at all educational levels. Students access information online from wireless hotspots on and off campus, including cafes, libraries and dorms. New laptops based on the Intel Centrino mobile technology to be introduced this month will double as all-in-one entertainment devices, making more space for other dorm room necessities, such as the minifridge.
7. Make a Wireless Cafe Your Extended Office: Advanced wireless communication combined with an increasing number of hotspots are heating up the coffee culture around the world with people genuinely relaxing on a cafe couch with everything they need to do their jobs on their laptops.
8. Reuse or Recycle That Old Equipment: If you’ve upgraded to an all-in-one laptop, consider giving your old DVD player or stereo to a charitable organization. Donate old computers to educational organizations.
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