Czech Republic Information Technology Report Q4 2013 - New Market Report

The Czech IT market continues to held back by the weak macro picture nationally and in the wider region, putting the market on a lower growth trajectory. The weak economic environment has negatively impacted both consumer and business confidence, while a climate of fiscal austerity is squeezing the value of public sector contracts. Despite these challenges the underlying growth dynamic of the IT market will ensure market growth remains in positive territory in 2013. Key trends in 2013 include demand for tablets and the rapid development of the cloud services market, while, over the medium term, a recovery in retail spending will add to the positive impact of government ICT initiatives, often backed by EU subsidies to propel growth.

Full Report Details at
- http://www.fastmr.com/prod/670558_czech_republic_information_technology_report_q4.aspx?afid=303

Headline Expenditure And Forecasts

Computer Hardware Sales: CZK35.6bn in 2012 to CZK36.2bn in 2013, an increase of 1.9% in local currency terms. This is a minor downgrade to our forecast in the Q4 update as desktop and notebook sales declined faster than expected in the first quarter of 2013 as retail spending has been hit by stagnant wages and unemployment.

Software Sales: CZK19.7bn in 2012 to CZK20.5bn in 2013, an increase of 4.2% in local currency terms. Demand for enterprise software solutions is increasing, while we also expect growth in security software solutions in both the consumer and business markets.

IT Services Sales: CZK31.1bn in 2012 to CZK32.2bn in 2013, a local currency increase of 3.6%. Growing demand for cloud computing will add to the growth trend in the IT services market as Czech organisations upgrade IT systems to gain or maintain competitive advantage.

Key Trends And Developments

The first quarter of 2013 saw a faster than expected decline in desktop and notebook sales. BMI was already forecasting a decline in unit shipments due to the growing popularity of tablets in the Czech Republic, and now cheaper devices are hitting the market. However, unemployment and stagnant real wages appear to have squeezed shipments even further. There was, however, a silver lining for Microsoft partner vendors that are facing stiff competition from tablets, namely the traction gained by ultra-thin notebooks and hybrids/convertibles. Although these are nascent markets, we believe there is significant growth potential for multi-use case devices once mass market price points are reached, which we expect to occur in the short-to-medium term.

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