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Gartner reduces its 2012 ICT spending forecast; telecom equipment revenues projected to increase 6.9%

Global ICT spending growth in 2012 is forecast to be lower than previously expected. Gartner Inc is now predicting growth of 3.7% this year. The firm’s previous forecast for the 2012 growth rate was 4.6%, and the growth rate for 2011 was 6.9%. Gartner projects total global ICT spending of $3.8 billion this year, up from $3.7 billion last year.

Among all major technology sectors (computing hardware, enterprise software, IT services and telecommunications equipment and services), telecom equipment spending is projected to show the strongest growth, with revenue increasing 6.9% in 2012, reaching US $475 billion. The telecom services sector is expected to remain biggest sector overall with revenue of $1,740 billion, up 2.3% compared to 2011.

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The enterprise software market is forecast to grow 6.4% to $285 billion, followed by computing hardware which is projected to grow 5.1% to $424 billion, and IT services, expected to increase 3.1% to $874 billion.

Gartner attributes the overall downward revision in its outlook to sluggish global economic growth, the Eurozone crisis and the impact of Thailand’s floods on hard-disk drive (HDD) production. According to the consultant firm, the Thailand floods, which left one-third of the country under water, are having serious implications for businesses worldwide, particularly with computer and storage purchases.

The shipment forecast for PCs was also reduced due to the impact of the HDD supply constraints on HDD and PC shipments in the first half of the year compounding the cautious environment for hardware spending in general.

The Eurozone crisis is also affecting results. The uncertainty for both businesses and consumers in Western Europe made Gartner adjust its forecast, and now the institution predicts IT spending in Western Europe will decline 0.7%.

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