IT spending for Asia-Pacific (APAC) is expected to grow by 4.4 percent in 2023, up from 3.8 percent in 2022, according to IDC.
Sparking this growth despite the global uncertainties are the reopening of China in the last quarter of 2022, slowing monetary policy tightening, and declining rate hikes by central banks in the region.
“Enterprise budgeted spending is currently healthy. Enterprises in the region will either continue to invest as planned or increase their budget in 2023. They will, however, closely monitor current economic behaviour since there is no recession-proof ROI, and they will either reduce or postpone spending,” said Vinayaka Venkatesh, Senior Market Analyst of IDC IT Spending Guides, Customer Insights & Analysis.
Consumer IT spending (related to consumer purchases of mobiles, tablets, PCs, wearables, and peripherals) is seeing a painful year of growth decline by 2.1 percent year on year in 2023, up from a growth decline of 2.6 percent in 2022.
Smartphones account for 72 percent of the overall consumer market, which saw a significant drop in shipments in 2022-23 due to higher inflation and an economic slowdown that discouraged consumer demand. Despite the decline, shipment of 5G-powered handsets continued to grow.
IDC expects a similar trend in traditional PCs market growth in 2023. Rising living costs and contractionary monetary policies continue to drive consumer spending toward non-discretionary items. The immediate concerns are the lower demand, excess channel inventory, weaker economic outlook and ongoing inflation.
Enterprises and service providers remain flat, with 9.8 percent growth in 2023 compared to 9.8 percent in 2022. Smaller deal volumes and delayed purchases in the commercial segments are being caused by fulfilled demand, cost savings, and difficult economic conditions.
China contributes to 51 percent of the overall market share, and its economic outlook has improved significantly since reopening in Q4 of 2022. China markets have grown rapidly in 2023, with a growth rate of 12.9 percent compared to 6.5 percent in 2022 for the enterprise and service provider segments.
IDC expects enterprise to increase their spending in the face of slowing economic conditions. However, they will be ready to scale back quickly if necessary. Their immediate concerns are being unable to access IT hardware due to supply chain constraints, labour shortage and managing demand for cloud subscriptions in line with budgeting plans.
Photo: Josh Sorenson
Entelechy Asia 