Net business forecast to boost Asian economies

Research firm International Data Corporation has forecast that "the first year of the new millennium" will see Internet-based business activities give a substantial boost to economies across Asia

Research firm International Data Corporation (IDC) has forecast that "the first year of the new millennium" will see Internet-based business activities give a substantial boost to economies across Asia as information technology (IT) spending hits US$1 trillion around the world.

(SCMP.com) - Despite a slowdown in IT spending in Southeast Asia and South Korea and the Internet stock crash, e-businesses would continue to be the driving force behind spending on IT hardware, software and services in 2001, IDC said.

It also said that the bulk of investments in online activities would come from traditional bricks-and-mortar businesses worldwide.

"The reason is simple: the battle is already engaged," said Dane Anderson, vice-president for Internet and computing systems research at IDC.

"For every dotcom that competes with an established business, there are a dozen more established businesses with online operations to worry about now. In addition, not all e-business is related to volatile sectors, such as e-tailing and advertising-supported content delivery."

In addition to the US$1 trillion worldwide IT spending, which includes US$70 billion in the Asia-Pacific region, excluding Japan, IDC expects numerous other key industry thresholds to be crossed in 2001.

Internet commerce worldwide is projected to be worth US$500 billion. In the Asia-Pacific region, excluding Japan, it will hit US$18 billion.

The number of cellular phone subscriptions worldwide is expected to total 600 million, while installations in the Asia-Pacific region, excluding Japan, are predicted to reach 160 million.

The total number of personal computers installed worldwide is predicted to reach 500 million, while PC installations in the Asia-Pacific region, excluding Japan, will be 75 million.

Web users around the world are predicted to number 500 million, 59 million of which will be in the Asia-Pacific region, excluding Japan.

The steady deployment of new-generation, Internet protocol-based cellular communications infrastructure is expected to result in wireless electronic commerce activities worth US$1 billion worldwide. In the Asia-Pacific region, excluding Japan, mobile commerce is projected to be worth US$100 million.

"IDC believes that an end-to-end integrated e-business solution is the logical next step after the integration provided by enterprise applications suites and e-commerce applications," Mr Anderson said.

Other 2001 predictions found in IDC's "Asia/Pacific Services: Opportunity Analysis" bulletin include:

  • Internet stocks will not stage a comeback.
  • Hype around mobile commerce and Internet connectivity will reach "hysteria levels".
  • The application service provider market will gain acceptance, but "there will be more hype than happening".
  • Customer relationship management applications will drive technology investments.
  • Mergers and acquisitions will abound.
  • Internet security solutions "will be hot".
  • IP telephony will gain a foothold.
  • P2P, for path to profitability, in online commerce will become "a red-hot buzzword", but get "a cool reception" from corporations.
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