2013-08-24 09:12:04 - Fast Market Research recommends "Turkey Information Technology Report Q4 2013" from Business Monitor International, now available
BMI expects IT market sales in Turkey will continue to grow in the medium term, based on a solid foundation of economic growth and modernisation. A continued wave of investments by multinational sector players such as Apple testifies that Turkey's IT market is expected to continue to be a regional outperformer over our five-year forecast period to 2017. There was, however, a slowdown in the market in 2012 and BMI has made a downward revision to its IT market forecast for 2013 due to faltering domestic economic activity and regional economic and political uncertainty. The faltering domestic economic activity has to be placed in context, however, as looking beyond the dip in growth rates 2012-2014, we believe the market to
have strong fundamentals for medium-term growth. The inherent demographic profile advantage, coupled with sustained growth and consistent government push towards reforms, lends a bullish, long-term future for the IT sector in the country.
Computer Hardware: TRY11.23bn in 2013 to TRY11.57bn in 2014,+3.0% in local currency terms. Slower growth forecast on the basis of a weaker economic outlook and the depreciation in the Turkish lira is also factored. Despite these drags, robust growth will continue with consumer purchases and government investment in IT for education key drivers.
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Software: TRY1.93bn in 2013 to TRY2.08bn in 2014, +7.7% in local currency terms. Arrival of Microsoft Windows 8 will provide a small boost, but enterprise software spending will continue to be the main driver of market growth.
Services And Cloud Computing: TRY2.70bn in 2013 to TRY2.89bn in 2014, +7.4% in local currency terms for services. Growing integration with the EU will edge Turkish companies towards increasingly embracing IT services. Refinement and maturity in cloud computing offerings by local and global vendors will make them attractive for corporates in general and SMEs in particular.
Key Trends & Developments
* Turkey is becoming an increasingly important regional hub for both hardware manufacturing and IT services. In April 2013 Indian IT services firm Tech Mahindra announced the launch of its new hub for Turkey and Central Asia in Istanbul. It hopes the hub will work as a near-shore centre for projects in the Middle East and Europe, while it is also focusing on Turkey as a source of growth because of the young and cosmopolitan populations, meaning greater demand for IT services and solutions from domestic firms. The announcement from Tech Mahindra followed the opening of local manufacturing setups by global IT majors such as HP/Foxconn and strengthening of local operations by printers vendors such as Ricoh and Konica Minolta, which will improve affordability and service support.
* Complimenting increasing private sector activity in the IT market are government policies and investments to develop the local industry. FATIH, the classroom computerisation initiative undertaken by the Turkish government will provide a positive boost to the hardware, software and system integration sales in the early years of the forecast. The government has launched a tender to supply 10.6mn tablets to 42,000 Turkish schools, with the value of the procurement being estimated at US$3-4bn over four years. The government appears to be using the initiative as a tool to promote local capabilities after it was reported in April 2013 that Next & NextStar, a prominent local consumer electronics company producing LED TVs, navigators and satellite receivers, was in talks with public authorities to supply the tablet devices that are part of the FATIH Project. Next & NextStar already has tablets in its product lineup, produced on an OEM basis, but it will begin producing its own hardware at its Sultanbeyli facility in mid-2013. The scale provided by the FATIH project will help local manufacturers to get costs down in order to offer competition for global leaders such as Apple and Samsung.
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