Now Available: France Information Technology Report Q3 2013

As a consequence of the weaker economic outlook for France, we have downgraded our forecast for French IT spending in the Q3 2013 update. We now forecast spending to increase by 2.8% in 2013 to reach EUR35.6bn. Growth trends within the IT market will ensure it stays in positive growth territory in 2013, and from 2014 growth will pick up as the economic environment becomes more supportive. Trends driving spending in the IT market include the growth of tablet sales, and we expect innovation in hybrids/convertibles and ultrabooks will boost sales in H213 and 2014. In addition, cloud computing is developing rapidly in France, both in terms of adoption by enterprises and the public sector, but France is also emerging as a potentially large base for cloud computing providers with local and global vendors investing in datacentre facilities.

Full Report Details at
- http://www.fastmr.com/prod/640238_france_information_technology_report_q3_2013.aspx?afid=303

Headline Expenditure Projections:

* Computer Hardware Sales: EUR7.6bn in 2012 to EUR7.8bn in 2013, then EUR8.8bn in 2017 with CAGR of 3.0% 2013-2017 in local currency terms. While desktop and notebook sales have experienced a sharp decline, this is compensated for by the growth in tablet sales.
* Software Sales: EUR10.4bn in 2012 to EUR10.7bn in 2013, then EUR13.3bn in 2017 with CAGR of 5.0% 2013-2017 in local currency terms. Windows 8 upgrades, and later the removal of support for XP, will see higher sales in operating systems, while efficiency-improving enterprise software will remain in high demand.
* IT Services Sales: EUR16.6bn in 2012 to EUR17.1bn in 2013, then EUR21.6bn in 2017 with CAGR of 5.3% 2013-2017 in local currency terms. Cloud computing is expected to be the key growth driver for IT services spending, with the regional growth trend supplemented by the presence of national cloud computing providers.

Risk/Reward Ratings: France's score is 78.2 out of 100.0. France ranks third in our latest Europe RRR table, behind the UK and Germany.

Key Trends & Developments

The latest data show that desktop and notebook sales declined sharply in France in Q113. The drop in volumes was sharper in France than the level observed in the UK and Germany, indicating that economic weakness has added to the global trend of consumers opting for tablets. Even with the weak economic backdrop in France, tablet sales have boomed, compensating for desktop and notebook declines, and keeping the market as a whole in positive territory. It should be noted that the increase in tablet volumes occurred in H212 as the market deepened with the release of low-cost Android devices, which have proved extremely popular with consumers and significantly eroded Apple's dominance. BMI expects competition to drive further price declines and innovation in form factors, with the potential for Windows 8 hybrids/ convertibles that leverage Microsoft's strength in productivity software and Intel's Haswell chipsets expected to be a growing force in the market.

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