Boston, MA -- (ReleaseWire) -- 06/09/2014 -- BMI View: South Africa's slow economic growth and weak investor sentiment will weigh on IT spending by businesses and consumers during our five-year forecast period, ending in 2018. However, we expect the successful completion of the May 7 2014 general elections and the victory of the ruling African National Congress (ANC) party to allay concerns o ver po litical instability and ensure continued government expenditure on various infrastructure and social projects, which would have a secondary effect on the IT market.
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We expect the IT services sector to record the strongest growth over our forecast period to 2018, followed by the IT software sector, which is benefitting from the take-up of cloud-based solutions. Falling demand for PCs and laptops, in favour of more mobile form factors such as tablets, has dampened our outlook for the computer hardware market in the consumer segment, although we expect continued government and enterprise patronage to sustain growth, albeit it minimal.
Headline Expenditure Projections
- Computer hardware sales: ZAR36.30bn in 2013 to ZAR38.34bn in 2014, up 5.6% in local currency terms. Declining demand for PCs and laptops and weak local currency will affect growth in 2014.
- Software sales: ZAR22.63bn in 2013 to ZAR23.21bn in 2014, up 7% in local currency terms. We believe the uptake of cloud-based software, which is less susceptible to piracy, will drive growth in software sales.
- IT services sales: ZAR35.36bn in 2013 to ZAR39.35bn in 2014, up 8.4% in local currency terms. We expect cloud computing and business process outsourcing (BPO) services to drive the uptake of managed services and outsourcing.
South Africa is in sixth position in our Q314 Middle East and Africa IT Risk/Reward Ratings table. South Africa's aggregate score of 55.1 out of 100 is down from 56.6 in our previous update and is slightly higher than the regional average score of 53.8. South Africa's best score is in the Industry...
The South Africa Information Technology Report features Business Monitor International (BMI)'s market assessment and independent forecasts covering personal computers and software; semi-conductors, memory chips, integrated circuits and general components; the internet and IT solutions. It analyses analyses regulatory changes (licensing, customs and intellectual property protection) and competitive landscapes comparing IT companies by products, sales, market share, investments, projects and expansion strategies.
BMI's South Africa Information Technology Report provides industry professionals and strategists, corporate analysts, IT associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the IT industry in South Africa.
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