Philippines, September, 2005 – IDC releases a study that serves as a databook on Philippine IT product and services by vertical and size segmentation spending. The Philippines saw 12% IT spending growth in 2004 to reach US$1,070.1 million, buoyed by th ehealthy economic performance and strong demand from users of divergent vertical industries and end-user segmentations.

IT has become a solid building block of today's everyday life, from business to societal needs and personal gratification. Such case is evident in the Philippine setting in which businesses hook operations to IT products and services, while home users utilize IT for education and entertainment purposes. IDC reports that spending on IT is one of the biggest considerations that have led the country to reach US$1,070.1 million in total spending in 2004. The relative under penetration of the country still favors IT players, as the country is headed to a 12.5% compound annual growth rate (CAGR) from 2004 to 2009.

Jubert Daniel Alberto, Senior Analyst, IDC Philippines states, “The country still has a genuine room for greater IT adoption. New rounds of acquisition, as well as projects that involve the renewal, replacement, and upgrading of divergent hardware and solution needs are in the offing”.

According to the study, hardware spending will still be the major force in IT spending, as the country has yet to reach its optimum level of IT adoption. Hardware is expected to corner 61% of the market, as it has not yet reached its saturation point wherein a large vestige of first-time PC buyers is prevalent or where end users still need further technology adoption. On the other hand, services is foreseen to take 27% of the total IT spending, on the back of heightened demand for project implementations centering on strategic solutions. Moreover, software is expected to account for 13% of the pie, lifted by the growth coming from the systems infrastructure software space.

Furthermore, IDC forecasts that the cutthroat competition among telecommunications players will play a vital role in the total IT spending of the country. Telco players will continue to strive hard to outdo each other and improve on their respective positions in the market, thereby spending on various hardware and IT solutions, as these components and services are necessary for the effective delivery of proposed telecommunications services.

Looking forward, IDC explains that vendors would need to beef up channel distribution network through tidying up of underperforming channels and focusing instead on channels that can deliver the necessary services and specialized value to clients, as IT users are now more discerning when it comes to IT products and services. IT players will also need to look out for emerging industries and recognize promising business areas, while repositioning business strategies and offerings to fully capitalize on market growth potential.

This report is a compendium of data tables of end-user IT spending and market opportunities across 17 vertical segments, as well as company sizes in the Philippines based on research completed in March 2005.

For more information about purchasing the research, please contact Hazmi at +603-2169-7526 or hyusof@idc.com. For press enquiries, please contact Stephen Chong at +603-2169-7521 or ckchong@idc.com.

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