2013-12-06 11:14:43 - Fast Market Research recommends "Philippines Information Technology Report Q1 2014" from Business Monitor International, now available
We expect the Philippines IT market to be a regional outperformer over the medium term due to the low penetration of products and services, an opportunity for vendors, and the rapid expansion of the BPO industry. We forecast total spending will grow by around 9.6% in 2013 to a value of PHP162.8bn. Over our five-year forecast period to 2017, we forecast a CAGR of 9.1% in local currency terms, with the market reaching a value of PHP232.3bn in 2017. Key trends driving this growth include broader PC ownership as incomes rise and average PC prices decline. In this respect the Philippines has great potential due to its low PC penetration and the bullish outlook for the economy and wages. The
Philippines continues to enhance its reputation as a global BPO centre, with early successes resulting from the call centre industry, but recent signs are of it moving to higher value processes such as software and applications development.
Full Report Details at
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Headline Expenditure Projections
* Computer hardware sales: PHP92.2bn in 2012 to PHP97.5bn in 2013, +7.7% in local currency terms. Shipments dipped in Q412, but we expect the PC market to recover in 2013, with fundamentals remaining strong. Low cost Android tablets that are proving popular across Asia are also expected to make a contribution to growth.
* Software sales: PHP17bn in 2012 to PHP19bn in 2013, +11.8% in local currency terms. Enterprise software penetration is low, but with the modernisation of local companies we expect strong growth in spending particularly for low cost cloud ERP systems.
* IT services sales: PHP42.1bn in 2012 to PHP46.7bn in 2013, +12.9% in local currency terms. We forecast services to outperform the other segments in medium-term growth, with software and application development outsourcing a key driver.
Key Trends And Developments
* The government in the Philippines continues to support the expansion of the local IT industry. The BPO industry generates most of the headlines, with government efforts to increase the supply of skilled labour, strengthen the regulatory environment and provide assistance to local firms, factors behind the success story. However it is also working in other areas that will benefit the wider population, for instance, investing in is e-government and education. In September 2012 the Philippines department of education adopted the Google Apps for Education cloud system to provide content and storage across its disparate education infrastructure.
* Several factors make the Philippine PC market one the most attractive in the region for vendors. PC penetration is low, meaning large potential for growth through sales to first-time buyers and upgrades/ replacements. Tablets also offer a significant opportunity, with the price of devices falling in H212 and a wide range of higher quality Chinese OEM devices hitting the market in 2013.Vendors that target regional differences are expected to see the fastest growth, with demand from outside Manila continuing to drive market expansion. Cebu is seen as a gateway to provinces in Visayas and Mindanao and is ranked by the Financial Times among the top 10 cities of the future in the APAC region. Cebu is also in the top ten of global BPO destinations, meaning a large IT literate population to market devices to.
Report Table of Contents:
BMI Industry View
- Business Environment
- Table: Philippines IT Sector - Historical Data & Forecasts (PHPmn)
- Table: Telecoms Sector - Broadband - Historical Data And Forecasts, 2010-2017
- Economic Analysis
- External Malaise A Drag, But Support Seen In Remittances
- Investment Boom On Solid Footing
- GDP Upgrade Well Deserved, But Watch Out For Risks
- Expenditure Breakdown
- Table: Philippines - Economic Activity
Industry Risk Reward Ratings
- Table: Asia Pacific IT Risk/Reward Ratings - Q1 2014
- Cloud Computing
Industry Trends And Developments
- Table: Regulatory Authorities In The Philippines
- International Companies
- Table: Lenovo
- Table: Google
- Local Companies
- Table: Stream Global Services
- Table: Microsourcing
- Table: IBM Acquisitions, 2012 (Total Value, US$3.964bn)
- Microsoft Corporation
- Oracle Corp
- Table: Oracle: Selected Acquisitions
- Table: Philippines' Population By Age Group, 1990-2020 ('000)
- Table: Philippines' Population By Age Group, 1990-2020 (% of total)
- Table: Philippines' Key Population Ratios, 1990-2020
- Table: Philippines' Rural And Urban Population, 1990-2020
- Industry Forecast Methodology
- Risk Reward Rating Methodology
- Table: It Risk Reward Rating Indicators
- Table: Weighting Of Components
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