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IDC lowers global IT spending forecast to 4.6% this year

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Citing a slowdown in economic growth in emerging markets, International Data Corp. lowered its forecast for worldwide IT spending to 4.6% growth this year, down from a May projection of 4.9% growth. Excluding smartphones and tablets, worldwide IT spending will be up only 1.7% this year, down from a May forecast of 2.6% growth, IDC projected. “The big story since the last report three months ago is the change in momentum around emerging markets,” said Stephen Minton, VP-global technology and industry research at IDC, during an Aug. 8 webcast to release the findings. “The slowdown in economic growth has lasted longer than we assumed it would at the beginning of the year.” The report, “State of the Market: IT Spending Review & Forecast Q2 2013,” breaks down IT spending by global regions and by specific technology investments. IDC projected that U.S. IT spending will also increase by 4.6% this year, up from a May forecast of 4.2% growth. “The U.S. economy overall is relatively stable,” Minton said, pointing to expected economic indicators such as improving housing and automotive markets in the second half of this year, which will help drive IT investments. “The forecast for the U.S. economy going forward over the next 15 months is looking pretty solid.” However, in emerging markets such as China and Asia-Pacific overall, economies are growing more slowly than expected. IDC lowered its IT spending forecast in China to 9.5% growth this year, down from a May projection of 12.9% growth, and for Asia-Pacific overall to 4.8% growth, down from an earlier forecast of 6.3% growth. “The slowdown [in China] has gone on longer than a lot of economists expected,” Minton said. “Some of the most bearish economists are now forecasting less than 7% GDP growth in China in the second half of 2013. That would take a lot of oxygen out of the global economy, and it would also have a negative impact on what is going on from a business and IT spending point of view in every region of the world.” Mobile devices are the bright spot in the IT industry. IDC now projects that worldwide spending on tablet computers will be up 39.0% this year, up from a May forecast of 32.5%. Spending on smartphones is expected to increase 18.5%, up from an earlier forecast of 17.2%. However, the rapid growth in mobile spending, combined with the economic slowdown in China, is negatively affecting PC sales worldwide, IDC said. The forecaster now projects that global spending on PCs will decline 7.2% this year, down from a May forecast of a 2.6% decline. Software spending (including software as a service) is expected to grow by 5.5% this year, unchanged from a previous forecast, IDC said. By the end of this year, almost 10.0% of total software spending will have moved to the cloud.
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