Emerging market volatility, mobile saturation will weigh down IT spending in 2014

IDC has downwardly revised its worldwide IT spending forecast from 5 percent growth to 4.6 percent for the year primarily as a result of slower growth in emerging markets and the deceleration of smartphone and tablet demand.
Written by Larry Barrett, Contributor

IDC is now predicting worldwide IT spending growth will increase by 4.6 percent this year, slightly lower than 2013's 4.8 percent improvement.

The IT research firm's latest report cited the inevitable deceleration of the white-hot demand for smartphones and tablets as well as currency devaluation and inflation concerns in emerging markets as the main reasons for the downward revision.

However, investments in overdue infrastructure upgrades and replacements in the US and Western Europe – including a 3 percent jump in server spending compared to last year's 4 percent decline – will help soften the blow.

"The inevitable slowdown in the explosive pace of smartphones and tablets is masking an underlying improvement in many areas of IT spending," Stephen Minton, vice president of IDC's global technology and industry research organization, said in the report. "There’s significant pent-up demand in the US and Europe for infrastructure upgrades, capacity and bandwidth investments, and overdue replacement cycles."

Regardless, everything points toward merely moderate growth over the next year as mobile devices are now bumping up against the same kind of pricing pressures and commoditization issues that have afflicted the PC, software and server sectors in recent years.

Throw in a dash of currency volatility throughout Asia and other emerging markets – one of the main reasons Apple offered up what appeared to be less-than-scintillating guidance during its first-quarter earnings call – and it's apparent this will be a wait-and-see kind of year for leading IT vendors.

"The US seems to be heading in the right direction, and the worst of the crisis may be over in Europe," Minton added. "While growth in mature economies will still lag emerging markets in most cases, the balance of risks has shifted considerably."

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