Market review

How fast is the regional PC market growing? How big is the market opportunity for 3G? Here's a snapshot of five industry hotspots.

Regional PC market ends on a higher note
IDC raised its forecasts for PC shipments in the Asia-Pacific excluding Japan (APEJ) region, following the market's strong performance in the second quarter. The research firm expects 40.0 million PCs to be shipped in the region in 2005, representing an annual growth of 14.8 percent. This will be followed by 44.9 million PCs in 2006, or growth of 12.2 percent.

Although desktops will continue to dominate over 75 percent of the unit shipments over the next two years, notebooks are the hot spot of the PC industry, with a staggering 35.7 percent annual unit growth expected in 2005, compared to 10.2 percent for desktops. Bryan Ma, associate director of Personal Systems Research at IDC Asia-Pacific, said China and India will continue to be huge engines for growth through the forecast period, although strong growth is also expected from emerging markets such as Pakistan, Sri Lanka, and Bangladesh.

Market's hanging up on 3G?
In Singapore, the three mobile operators launched their 3G services this year, while the Philippine government took strides to revise the country's draft rules on the assignation and allocation of 3G licenses and frequency bands.

3G received a lackluster response in some countries. The take-up rate for 3G in Malaysia was less than sterling, with market research firm GfK Asia estimating that of the 3.5 million phones sold in the country in the first half of the year, only 1.4 percent or 48,000, were 3G-enabled units. In another development, one operator in Hong Kong opted for the older Edge (Enhanced Data Rate for GSM Evolution) technology to deliver its data services. The operator had wanted a mobile network that was profitable but that could be deployed without the high overheads of a 3G network.

According to IDC, although the lack of variety in handset choices and content has contributed to the growing pains of 3G, the Asia-Pacific market potential is huge. The research firm noted that 3G subscribers reached 10.5 million in 2004, and is expected to reach 142.6 million in 2009, growing at a compound annual growth rate (CAGR) of 68.5 percent. By the end of 2009, IDC expects more than 12 percent of total mobile subscribers in the region to utilize 3G services, with South Korea leading at 63 percent, followed by Hong Kong, Australia, Singapore then Taiwan.

There were 43 million 3G users worldwide at the end of June 2005, according to Gavin Patterson, an analyst at Informa Telecoms and Media. By the end of 2005, the number is estimated to top 70.6 million worldwide.

SMS gets the message across
Driven by China and India's mobile phone markets, total SMS (short message service) traffic in Asia is projected to increase from 540 billion messages in 2005 to over 1.2 trillion by 2010. Revenues from SMS usage in the region is also expected to increase, from US$7.2 billion in US$9.9 billion in 2005 to US$15.1 billion, according to Portio Research.

Mobile gaming is no child's play
Mobile online gaming in the Asia-Pacific excluding Japan region will continue to grow at a steady pace, capturing the interest of providers as a potential revenue-generating service, according to IDC. As users in the region continue to consume mobile rich-media content, such as ringtones, logos and wallpapers, IDC believes that further inroads into the mobile online gaming space will follow suit. The path of natural progression will entail a shift in usage patterns--from "simple content" as in SMS-based applications, to feature- or "media-rich" content such as Java-based games and applications, said an IDC report.

SMB IT spending to increase
One of the most sought-after markets by tech vendors, small and midsize businesses (SMBs) in the Asia-Pacific region are projected to spend US$9.1 billion on PCs and slightly over US$800 million on servers.

IDC has projected the SMB segment increase its revenue contribution to the region's overall expenditure on PCs and servers from 28 percent in 2004 to 31 percent percent in 2008.

Based on the results of IDC's annual Continuum 2005 survey, the two main considerations that SMBs have during the decision process for purchasing servers are the reliability and the price/performance of the product.

Small and midsize businesses in the Asia-Pacific region are also warming up to leasing or financing their PCs and servers. According to IDC, there was a slight increase in the percentage of respondents utilizing these options over the past years and the percentage will continue to growing over the next few years.