Business leaders have been told to expect the technology stock turmoil to continue over the next two or three years, even as some sectors show improvement.
The consensus among analysts at last week's Gartner Symposium in Brisbane is that the difficulties that led to this year's dot-com crash will continue as products and services fail to meet expectations.
"You have to blame Wall Street for a lot of the problems we are seeing because during the valuation process for dot-com companies a lot of bold predictions were made that raised expectations too high and the technology failed to deliver what people expected," said analyst Bob Egan.
Gartner researchers pointed to technologies such as wireless application protocol (WAP) phones and their sluggish Internet access, application service providers (ASPs) which could not provide the service they promised, and expensive, unreliable voice-over Internet protocol (VoIP) systems as examples of falling far short of expectations.
Egan said WAP phones had never gained a significant following and were already destined for replacement.
Analyst Rolf Jester said in a matter of months ASPs had gone from being the big trend to heading for trouble. He predicted 60 percent of the providers would be out of business by 2002.
But as some sectors fall flat, others sprint forward. The Internet will continue to expand exponentially, and new technologies, such as wireless, will improve and become more pervasive.
Gartner's projections for China illustrate the mixed prospects for the future.
While Internet use was expected to expand rapidly, tripling to 60 million people online in a few years, Gartner said the booming e-commerce market would fail to materialise.
Bob Hayward, head of research for Asia-Pacific, said hype and ignorance were behind the continued rush to offer e-commerce in China, not solid opportunities.
"I pick up the newspaper every week and see surveys where people make the invalid assumption that if the number of Internet users goes from 20 million to 60 million you are going to see a corresponding increase in the amount of e-commerce going on in China. We do not think it is going to happen," he said.
Gartner projected business-to-consumer e-commerce in China would be worth US$571 million by 2003, up only modestly - in Internet terms - from US$27 million now. The mainland market would be worth less than that of Malaysia (US$769 million) and would fall far behind the US$2.7 billion expected for Hong Kong.
On a per-capita basis, the mainland fares even worse by comparison with other Asian countries.
Hayward said China was a different market from other parts of Asia, the US and Europe. A Gartner study of 3,000 mainland Internet users found they lacked interest and the means to shop over the Net. "We found the majority of people are spending every cent they have available to them just getting on the Web and using it," he said.
"Most Chinese do not look at the Internet as a giant shopping mall the way Western people do. They still use the Internet for its original purpose of exchanging academic information and communicating with each other."
If Gartner's assessment proves true, it will be dire news for the thousands of e-commerce sites which have opened in the past few years. There have already been signs of trouble to come as prominent sites, such as Tom.com, have cut staff to control costs. Others have closed.
China has struggled with e-commerce because of poor delivery, difficulty developing a secure payment system and cultural preferences for shopping in local markets.
Hayward said moves by Beijing to tighten restrictions on Web site operators would damage prospects for e-commerce. Regulation stifled creativity, and would discourage entrepreneurs.
China is not the only emerging market where Gartner said the hype would not be matched by reality.
India, with a billion people and only three million Internet users, was expected to be an e-commerce bust because even the relatively affluent middle class was not interested in online shopping.
