Mobile devices sales to see strong growth, small players dominate
IT spending in India is slated to grow by 7.7 per cent this year, to a total of $71.5 billion, according to forecasts made by Gartner Inc., technology research and advisory firm. This outlook, among several other findings on the scope of mobile technologies and cloud services, was discussed and announced at the recently concluded Gartner Symposium and IT Expo held in Goa.
Despite “inflationary pressures and appreciation of local currencies”, the Indian forecast is strong, with telecommunications market leading the pack, accounting for 67 per cent of the total IT spending. This is set to increase from $44 million in 2012 to $47.8 billion in 2013, at 7 per cent, analysts said.
The services and hardware sectors account for around 13 per cent each. According to Gartner, the computing hardware market in India is projected to reach $9.5 billion in 2013, and software spending would total nearly $4.0 billion. Software would record the strongest revenue growth at 15 per cent, IT services would grow at 12 per cent, a release from Gartner stated.
Gartner announced a very optimistic outlook for sales of mobile devices in India.
Sales, it predicts, would touch 251 million units in 2013, an increase of 13.5 per cent over 2012, making it the fastest growing segment across hardware and software. Over the next four years, this would surpass 326 million units.
Sharing perspective on the nature of this market, Gartner analysts noted that there are more than 150 device manufacturers in the fray.
Interestingly, a majority of this caters to the low-end consumer selling low-cost feature phones. These phones account for 91 per cent of overall mobile sales. Manufacturers such as ZTE, Micromax, Karbonn Mobile, Huawei stand at sixth, seventh and twelfth in the Indian smartphone market, Gartner observed.
These companies have been expanding their portfolio and offer devices for several segments, and give the mobile biggies, Samsung and Nokia, a run for their money.
In a release, Anshul Gupta, principal research analyst at Gartner, observed: “The increase in share of smartphone device sales, declining sales to first time buyers and the continuous focus of global manufacturers on the low-cost feature phone market, has put many of the 150-plus local and Chinese device manufacturers under survival mode. Many of them are already struggling to maintain share in the growing market.”
Top analysts reportedly noted that businesses are looking to IT to enhance “customer support, supply chain management, optimising business processes or helping drive innovation in the business”, however, there is little hardware or software infrastructure in place. “IT is also in transition from being viewed as a back-office support function to a frontline business-focussed function.”
Partha Iyengar, head of research – India, at Gartner, pointed out, in a release, that hardware is slated to account for 14 per cent of all IT spending by 2016 (currently around 9 per cent), and the fastest growing space will be mobile phones. This will account for at least 42 per cent of all telecommunications revenue and 26 per cent of IT spending.
Sondergaard, speaking at the enclave, said we live and work in a “promising age” unleashed by a nexus of “social, mobile, information and cloud.” He emphasised on the potential of big data, saying firms would be distinguished by the quality of their predictive algorithms; that is how they are able to use the data they have to leverage business intelligence.
So, he noted, that in the next few years, a third of enterprises would hire Chief Data Officers, proficient in “curating, managing and governing information” and finding professionals, such as data scientists and experts in non-relational data management technologies.
Social media, dubbed as ‘social computing’, Gartner notes is “changing the fundamentals of business management”. Mobile too would have a huge impact on “application delivery, employee productivity and process work flows”.
Positive on cloud
Analysts were also optimistic about growth in public cloud services, slated to grow by 32.4 per cent in 2012 to a total of $326.2 million.
Revenues from public cloud is around $110 billion. In cloud services, Software as a service (SaaS) emerges as the largest growth segment in 2012, while Infrastructure as a Service (IaaS) is also forecast to see considerable growth.
Business process services and application infrastructure services (popularly known as platform as a service) would also see relatively decent growth, Gartner said in a release. Besides India, cloud-related services would see high growth rates in China and Indonesia and China.
Gartner analysts also sounded sceptical on market hype that Internet services would “wipe out” mainstream banking. Though tech firms would play a “considerable role in shaping the banking industry of the future”, Gartner observed that traditional banks would continue to be relevant and “have the edge over their Internet-oriented rivals”.
Examining the future of banks, David Furlonger, vice-president and Gartner fellow, said that Internet-oriented mega-firms are seen as the commercial enterprises of the future. However, as far as retail banking is concerned, it would be like trying to hammer a square peg into a round hole, this just does not fit.”
That digital mega-firms are adept at data management and analytics works in their favour. This is also why mega-firms would alter and shape the market, analysts noted.