IDC: Asia's tech hubs still growing strongly

Singapore and Hong Kong continue to distance themselves from other IT markets in the Asia-Pacific (excluding Japan) region with their strong government support for IT, robust telecommunications infrastructures and high PC penetration rates, according to market analyst International Data Corp. (IDC).

Notably, the two markets were among the first in the region to completely liberalize their telecommunication markets, IDC said in a report issued Monday.

Over the next four years, Singapore's IT market will grow by 13.2 percent per year to be worth US$6.1 billion in 2005. Hong Kong's IT market will grow at 9.8 percent per year and be worth $4.9 billion, IDC said.

Both markets are strongly hardware-oriented, as is typical of Asian markets. Almost 70 percent of IT spending in Hong Kong currently goes toward hardware products. Singapore is slightly more oriented toward software and services, which make up nearly 50 percent of IT spending there.

Hong Kong's hardware market is thus slightly larger than Singapore's in value terms; Singapore's software market is roughly twice the size of Hong Kong's. As both markets mature, spending will increasingly shift toward software and services in both markets, according to IDC projections.

The hardware markets in both locations are dominated by international brands, with IBM Corp., Hewlett-Packard Co. and Compaq Computer Corp. between them taking more than 40 percent of the market in Singapore and 50 percent in Hong Kong, IDC said.

The Hong Kong and Singapore markets show different profiles, which may influence their growth in future years. Hong Kong is still adjusting to being a special administrative region of China, but the size and rapid growth of the mainland China IT market could prove a boost for Hong Kong, according to IDC.

Singapore's economy is more tied to the ups and downs of the U.S. market and to investor confidence in the ASEAN (Association of Southeast Asian Nations) grouping, of which Singapore is a member, IDC said.

IDC is a subsidiary of International Data Group Inc., the parent company of IDG News Service.

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