China Information Technology Report Q4 2015
BMI View: A minor downgrade to the IT market forecast in Q415 to reflect a slightly weaker economicoutlook has not materially altered our view that China will continue to record strong IT spending growthand IT sector development. The supportive and forward-looking policy environment combines with marketfundamentals to provide strong growth prospects resulting from the size of the population, rising incomes,relatively low penetration of devices and solutions and a supportive policy environment. IT spending growthin China is expected to outperform on a regional and global basis, with a CAGR of 8.2% forecast2015-2019. There is however downside risk, not least for foreign vendors operating in China where thepolicy environment favours local enterprises. Additional challenges include the diminishing pool of firsttimebuyers over the medium term, high levels of software piracy, cybersecurity issues, intensecompetition for price-sensitive consumers and uncertainty generated by regulatory decisions, particularlyin the rapidly developing cloud computing market. Nonetheless, we believe the outlook is positive overalldue to the factors mentioned above.
Headline Expenditure Projections
Computer Hardware Sales: CNY561.7bn in 2014 to CNY577.0bn in 2015, +2.7% in local currencyterms. Forecast downgraded in Q415 update to reflect impact of slightly weaker economic environment,but sales will remain robust as tablet market stabilises after decline in 2014.
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