2014: Vietnam’s ICT Industry Transitions To The 3rd Platform of Mobility, Cloud, Big Data and Social Business , says IDC
20 Dec 2013
Ho Chi Minh City, Vietnam, December 20, 2013 – Moving into 2014, IDC believes that the main theme of IT and telecommunications market in Vietnam will evolve from traditional processes.
The emerging of the 3rd Platform (Cloud, Big Data, Mobility and Social) will require service and solution providers, and Vietnam companies to transform themselves to move faster into a more mature stage of ICT. More insights can be found in the report, “IDC Vietnam ICT 2014 Top 10 Predictions".
Ha Ngoc Khuong, Market Analyst IDC Vietnam says, “This IDC study discusses the factors that will have biggest impact on the ICT market across Vietnam in 2014. The market has been more challenging than before due to unfavourable economic times in Vietnam, coupled with changing appetite of consumer and business. IDC sees a fairly traditional economy moving towards one that is technology laden, where organizations scale up technology's contribution into the bottom line."
Drawing from quarterly local ICT market tracking done by IDC's analyst in Vietnam and incorporating the lasted IDC research, the following are the top 10 ICT predictions in 2014. These trends are key driver that will reflex a significant movement of the Vietnam ICT market in 2014.
1. Vietnam ICT spending willgrow strongly by 15.5% in 2014
IDC predicts that ICT spending in Vietnam will project a growth rate of 15.5% in 2014, following a modest growth of 8.4% growth in 2013. The total ICT market in Vietnam is expected to reach US$13.05 billion in 2014. If market forecast materializes, Vietnam will be among the top ICT spenders in Asia/Pacific in 2014.
2. Homegrow smartphone brands will be more competitive
Recently, IDC has seen increasing competition on the budget smartphone segment from local players like Viettel, Q-Smart and MobiiStar. IDC expects homegrown brands to be even more competitive in 2014 as they challenge the status quo in market share between foreign brands versus homegrown ones.
3. Mobile gaming to explode, but not without challenges
The proliferation of smart connected devices extends new opportunities for gaming in Vietnam. The recently introduced Decree 72 by Ministry of Information and Communications (MIC) has cleared up much uncertainties around game development and license issuances. IDC estimates unique mobile online game user in 2013 will reach 2.68 million, and expects to achieve 39.1% growth in 2014. However, the limits of technology and recently increased price of 3G may hamper the strong growth of the game mobile online market.
4. Vietnam desktop PC market continues growth
IDC sees the need for desktop PC consumption in 2013, particularly in consumer segment that gained 21% from a year ago. Continued demand for desktop PC is expected in 2014, notably from 2nd-tier cities and new established businesses. In view of that, IDC forecasts that the desktop PC shipment will reach 3% growth in 2014.
5. Refarm 2G frequency for 3G networks
The ever-increasing consumer communication traffic demand continues to outstrip the network capacity, putting pressure on the operator's network. As the ROI for investment in 3G, estimated over US$2 billion, has not been achieved yet, Vietnam operators like VNPT and Viettel have proposed that the Ministry of Information and Communication (MIC) refarms 2G frequency for 3G networks.
6. Telcos will seek mutual partnership with OTTPs
Telcos is facing a new challenge to their business model as Vietnam subscribers are now giving up traditional data services like SMS or MMS, in favour of making calls and sending messages through over-the-top (OTT) applications. As such, IDC expects there will be increasing partnership structure between OTTPs and local telcos in 2014, which will bring a win-win solution for both players.
7. Local enterpise mobility partner ecosystem starting to form
IDC notes that the enterprise mobility partner ecosystem in Vietnam is starting to form, with the recent partnership deal between Mobifone – Samsung – FPT Software. IDC expects this trend will shape up more clearly in 2014 as more services offerings will be introduced to the market and define the partnership structure that help vendors, services provider, independent software vendors to position themselves in the 3rd platform era.
8. Local IT Service Providers redefine services porfolio
As the market heads towards the 3rd platform, IDC observes that local IT players are somewhat disengage with the new landscape as their business volumes are still heavily based on the 2nd platform. Away from the traditional IT services business, IDC expects key local IT services players who aggressively seek growth and business sustainability to redefine their engagement.
9. Stronger IT adoption push from lower tier cities and provinces
The phenomenon of Danang Smart City may encourage IT adoption in lower tier cities and provinces which is seeking more ICT transformation to improve their public services. Unlike the past, where lower tier cities and provinces rely heavily on ministrial and central authorities for investment approval and adoption guidance, IDC expects they will independently seek their own funding to push out ICT initiatives like metronet, data centers, free wifi offering or public utilities monitoring system.
10. Windows XP: To keep or not to keep
According to Microsoft, as of March 2013, the penetration of Windows XP in Vietnam is 45.8% with approximatelya 5.5 million PC installed base. Recently, Microsoft announced that it will end support for Windows XP by April 8, 2014. Companies in Vietnam will have to decide if they want to invest in the new OS, choose new options like Virtual Desktop Infrastructure or stick with their XP.
For more information about this report, “IDC Vietnam ICT 2014 Top 10 Predictions", January 2014 (forthcoming) please contact Lam Nguyen at +848-3521-8009 or firstname.lastname@example.org. To set up an interview with Ha Ngoc Khuong, please contact AgitaSaraswati at +6221 520-3496 or email@example.com
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