Czech IT Investments Predicted to Rebound in 2012 Despite Tough Economic Environment, According to IDC
20 Dec 2012
Prague, 20 December 2012 – IT investments in the Czech Republic are expected to rebound in 2012 after a slight decline in the previous year, despite the difficult economic situation and the European sovereign debt crisis. According to a recent study by IDC, Czech IT expenditure is expected to reach $5,810 million in 2012, up 4.7% from 2011, when the country's decent economic performance translated into solid IT spending, particularly in the manufacturing, public, and infrastructure services sectors.
“IDC expects IT spending in the Czech Republic to pick up in 2012 and fully recover in the medium term as the economies of the main Czech export target markets across Europe recover from the debt crisis,” says Senior Research Analyst Milan Kalal of IDC CEMA. "The Czech Republic, probably more than any other nation in Central and Eastern Europe, has managed to achieve a balanced economy in terms of vertical market spread, which has enabled it to sustain investment growth year after year."
Key findings from IDC’s research of the Czech IT market include:
- The infrastructure services vertical market, which includes transport, communications, and utilities, maintained its leading position in terms of IT investment, accounting for 25.1% of total spending in the Czech Republic in 2011, at $1.39 billion.
- Organizations in the combined manufacturing vertical (process and discrete manufacturing) spent $933.29 million on IT in 2011, which represents 16.8% of the IT market's overall value, having benefited from the strong performance of the automotive industry and high levels of foreign direct investment. In the manufacturing industry, competitive pressures and the need to increase efficiency are shifting IT investments from hardware to software and IT services.
- Organizations in the public sector (government, healthcare, and education) spent $924.31 million on IT in 2011, accounting for 16.6% of the total IT market. Public sector IT investments increased 2.8% year on year in 2011, which represented the fastest growth of any sector last year. The increase was primarily tied to ongoing egovernment projects and the implementation of the Basic Registries project.
- Smartphones are changing the IT landscape: The enormous boom in smartphones and media tablets in 2011 pushed the development of mobile technology and services. Sales of media tablets in the Czech Republic expanded 4.6 fold year on year in 2011, while smartphone sales jumped an impressive 42.6%. However, these developments adversely affected the sales of feature phones and PCs.
“The smartphone and media tablet boom in 2011 resulted in a major shift in the hardware segment. Sales of new mobile devices expanded rapidly, while sales of feature phones and PCs declined sharply. However, the increase in sales of smartphones and media tablets did not offset the loss in revenue from traditional products, significantly contributing to stagnating IT spending in the Czech Republic last year," explains Kalal.
About the Research
IDC's Czech Republic Vertical Markets 2012–2016 IT Spending Forecast (IDC #EV04U) provides a detailed overview of IT spending trends and forecasts for 17 vertical markets (or sectors) and nine product and service categories in the Czech Republic. The study features overviews of key industry developments, industry challenges, and vertical-specific IT drivers and trends and includes tables detailing IT spending by vertical market for each product and service type for 2012–2016. Analysis is based on continuous research, the monitoring of IT spending and emerging purchasing patterns, and supply- and demand-side research.
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