IDC releases its top 10 predictions for the Malaysia ICT Market for 2007
09 January, 2007
Kuala Lumpur, January 09, 2007 – As 2006 created a strong foothold for the Malaysia market to adopt new disruptive technologies, whether these are business models, products or services, IDC predicts that there will be a strong acceptance of these technologies in 2007. As the economy picks up, due to substantial spending from consumers and enterprises, new disruptive models will result in hyperdisruption. This will bring about major structural changes in different industry sectors at once – all interacting with one another and more importantly, accelerating one another.
As forecast in December 2005, IT spending for 2006 would grow within the 12-13% range. As stated in the IDC Black Book published in November 2005, Malaysia's IT spending was expected to surpass the US$4 billion mark and enjoy 12.3% growth from 2005.
"ICT spending in Malaysia for enterprises is beyond having a mere efficient infrastructure or a cost saving enabler, but businesses need to envisage IT as tool to generate greater value and better returns. It is a reality that businesses face today, resulted by the amount of pressure from intense competition and amore demanding market. As Malaysia moves beyond IT infrastructure spending, the moderate market growth will drive vendors and service providers in a relentless competition for the growth pockets in the country. We will see a year with more convergence, not only in technologies or devices but also in terms of delivery of services," said Selinna Chin, Managing Director of IDC Malaysia, Indonesia and Philippines.
From the standpoints of business users and consumer users alike, IDC makes the following top 10 predictions for the Malaysia ICT market for 2007:
1. IT spending not taking a break yet
IDC predicts that the IT spending will grow in the range of 10-12% in 2007 after enjoying 12-13% growth in 2006 (based on IDC Black Book, November 2006). The double-digit growth will be contributed by the changing demand in IT services with the disruptive business models of how IT services are delivered and deployed. Hardware, with a base of US$2.4 billion market in 2006, is expected to enjoy 8-10% growth in 2007. Packaged software will most likely grow in the range of 7-9%.
2. Evolution to continue in the telecommunications market
2007 will observe a continuation of the Malaysian telecom market's evolution in numerous technologies and services. The investments on infrastructure, resources, licenses, research and development in 2006 will continue on into 2007 and will set the pace of movement for new telecommunications services such as next-generation network (NGN) type services, services as a result of fixed-mobile convergence from both the fixed and mobile service providers, and the digitalization of the country's TV broadcasting services which will develop a renewed playing field for free-to-air TV owners against the country's leading satellite based pay TV operator. These are some of the key highlights that IDC believes will set the stage for the evolution of 2007's telecommunications market.
3. Software vendors to ratchet up channel investments to extend enhanced relationships to a broader base of lower-tier partners
Software vendors will invest in new channel offerings to expand both the breadth and depth of partner support to drive successful expansion of SMB market share and optimize vertical presence. Vendors also need a more highly skilled partner ecosystem that can participate in one or more of the following:
- Identifying business issues
- Positioning and selling the appropriate solution
- Implementing the solution
- Supporting the solution
4. SIs (system integrators) to redefine delivery models to be competitive
Starting from 2007, IDC expects to see more players taking the same footsteps to standardize their services offerings in the consulting and system Integration space. IDC expects "productization" of services would bring a competitive new wave of offering consulting and implementation services that are closer to customers' expectations.
5. IT and telco convergence to create "talent recruitment war" between IT service providers (ITSPs) and telco service providers (TSPs)
As managed services opportunity grows, the competition between TSPs and ITSPs would continue to grow with some cases where players choose to cooperate with each other. As competition arises, the "talent recruitment war" is going to continue, an area where ITSPs need to take precautionary action to retain valuable staff in the network management skills area.
6. Demand for notebooks to continue to soar
The outlook of the Malaysia notebook market is optimistic and is expected to perform at an overall 14% growth rate in 2007. IDC believes that the notebook market will continue to be fueled by increased awareness of mobile computing, more aggressive promotional activities by the vendors, and price competition that will make notebooks more affordable to more buyers.
7. Sub-RM1, 000 converged devices to boost the adoption rate
The mobile converged devices market is entering a new era of lower cost, higher volume devices into the mass market. As more converged devices drop below the sub RM1, 000 average street price level, the adoption rate of these devices is expected to increase tremendously in 2007.
8. Watershed Year for Content. Making it or Breaking it
With the potentially large growth in these next generation services, IDC believes that one of the key drivers for sustained growth would be the efficient delivery of services to the consumers. It is without a doubt that content will play a pivotal role in developing these services up the product lifecycle into the mass adoption arena. IDC believes that in 2007, key developments such as more emphasis on content aggregation, re-launching of mobile TV services in the country by Pay TV operators such as Astro and MiTV, and the addition of content from other countries for the local audience will emerge
9. The bright spot of wireless broadband in Malaysia
IDC believes that WiMAX adoption in Malaysia will be swift, particularly after it crosses the typical tri-monthly introduction stage characterized by cautious adoption and awareness buildup. The hype from WiMAX has been seen and heard by industry stakeholders the world over yet consumer awareness in Malaysia is trailing far behind. Despite the delays, IDC is of the opinion that MCMC and KTAK have taken the right approach to emphasis nationwide rollout for wireless broadband (WiMAX) services and use of locally produced equipment/content.
10. More Intense Competition As A Result of Disruptive Change in The Peripherals Market
The transformation of how users, whether it is commercial or consumer, buy or use IT peripherals have changed in line with the other products that interact and accelerate the growth. The proliferation of different input products such as digital camera, high-speed scanners and photo has prompted users to relook at the overall needs of printing in a different manner.
For more information about purchasing this research, please contact Hazmi Yusof at +603-2169-7522 or hyusof@idc.com; or Stephen Chong at +603-2169-7521 or ckchong@idc.com
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