SARS to dampen IT spending - News - Business

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This story was printed from ZDNet Australia.
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SARS to dampen IT spending

By Winston Chai, Special to ZDNet
April 22, 2003
URL: http://www.zdnet.com.au/news/business/soa/SARS-to-dampen-IT-spending/0,139023166,120273864,00.htm

Singapore's IT market slumped by 7.8 percent in 2002 and any rebound this year will be curtailed by the SARS scare, says market researcher International Data Corp (IDC).

According to the firm's latest report, technology spending in the city-state totaled US$3.05 billion last year, a slight dip compared to US$3.31 billion in 2001.

"Looking at the declining outlook for fixed business investments over the past few months, it is understandable that the IT market outlook must also be adjusted downwards," said Gary Koch, IDC's director of IT spending research.

Following US trends, estimates of business investment expectations have been declining in Singapore since September 2002, with a sharp drop last December and again in March this year, he added.

Looking ahead, the company expects the Singaporean IT market to see a moderate growth of 4.9 percent this year, but warns the outlook could worsen once the economic repercussions of SARS (Severe Acute Respiratory Syndrome) set in.

"The various economic sectors are certainly linked to each other, hence an impact on the retail, travel, tourism, entertainment and events businesses due to SARS will have an impact on the overall economy and consequently on the IT market", said Piyush Singh, managing director of IDC Asia-Pacific.

The scare surrounding the outbreak of the pneumonia-like virus has already caused a slew of tech conferences and tradeshows in the island-state to be cancelled or rescheduled.

Spurred by the business gloom, the Singapore government last week announced US$130 million worth of rebates, fee cuts and grants to help SARS-hit industries such as transport and tourism.

Despite the overall IT slump in 2002, the industry did see some bright spots in broadband services and WLAN (Wireless Local Area Network), said Singh.

The firm said the number of broadband subscribers in Singapore grew by 54 percent in 2002 and this figure is expected to grow by more than 80 percent this year.

In the area of WLAN, IDC expects Singapore to become the third largest WLAN subscriber market in Asia-Pacific with 25,000 subscribers by year-end, behind Korea and China.