Despite the anticipated cautious spending on Information and Communications Technology (ICT) in the Philippines, IDC predicts that specific pockets of opportunities will exist, driven by regionalisation and market expansion outside the Manila metro area. The heightened ICT awareness in both the consumer and commercial sectors will also contribute to this growth. Although there are still some segments in the country that have yet to fully adopt or implement IT infrastructures, gradual steps by ICT stakeholders are being taken to address this.
Jubert Daniel Alberto, Research Manager for ASEAN IT Spending at IDC Philippines, declares: "Given the current global economic outlook, ICT stakeholders would need to look into product offerings alignment while accelerating the pace of change. This would also involve strengthening their channel network capability across the country and, more importantly, seeking new opportunities, bearing in mind wild-card events and the psyche of Pinoy ICT users. Within a downbeat market, there lies specific pockets of opportunities spawned by the need to continually reduce overall ICT adoption cost in the long-term while also ensuring that market and customer traction is secured."
The following are the top ten predictions that IDC believes will shape the ICT industry in the Philippines in 2009:
1) Philippine ICT spending will grow 6.3% in 2009 (lower than first forecast). IDC predicts a slower growth of 6.3% in IT spending in the Philippines for 2009, which is weaker when compared to IDC's "post-crisis" [1] forecast in July 2008 where total IT spending was predicted to grow by over 10%. While the remittance level will remain comparatively stable, the meltdown in the United States, the country's second-largest export market, may hamper overall ICT investment in the Philippines. The drop in IT spending growth is significant due to the anticipated lower end-user spending habits in the face of the global economic crunch. IDC does, however, believe the country still offers opportunities, especially as the Philippine market is not as advanced as other Asia/Pacific countries when it comes to ICT adoption. The continuing trend of market expansion outside the Manila metro area, toward the provincial centres, is seen to greatly aid in maintaining a positive outlook in 2009;
2) Green IT will ride the waves of global economic slowdown for greater cost reduction. IDC expects investments in Green IT will gain popularity in the context of greater cost savings. Green IT adoption slowly made its way into the Philippine ICT market and is expected to boom in the next 12 months. Based on results from the latest iteration of IDC's Green Poll conducted in September 2008, environmental sustainability will shift from the mature economies to the developing nations in Asia-Pacific. Increased awareness about the environmental and economic benefits of Green IT, coupled with corporate social responsibility, will lead end users to demand "greener" technology from ICT vendors;
3) Next-generation customer care will emerge due to trying times. Across Asia-Pacific, the use of Web 2.0 technologies in the enterprise sector is scaling new heights, especially in 2009, driven by the need to look for more efficient ways of building a more personal relationship with customers, while balancing various economic, demographic, and technological factors. Similarly, IDC believes that in the Philippines this coming year the enterprise sector will actively pursue next-generation customer contact through the innovative use of Web 2.0 to handle customer inquiries and extend services through this means;
4) Fixed Wireless Access (FWA) will stay upbeat through the economic downturn. In 2009, IDC sees the continuous rise of the FWA broadband market, especially in terms of the number of subscribers. Since 2006, the FWA market has not shown any indication of a slowdown. Strong consumer demand and continuing marketing efforts have supported the growth of FWA both within the metro area and in surrounding locations near key cities in the country. With new technologies and new players coming in, this market is anticipated to grow despite the economic downturn;
5) Telco players will reassess their game plan in 2009. As the effects of the worldwide economic downturn gradually reach Philippine shores, IDC expects the Philippine telecommunications players to adapt to the changing economic environment and eventually reconsider their marketing efforts, product focus, and, for some, even spending. Though IDC maintains that the telco sector will be among the industries moderately hit by the temporary slump, most players in this field will still be reassessing their business strategies for continued growth;
6) WiMAX will go back to being a buzzword in 2009. Three years after the National Telecommunications Commission assigned frequencies for wireless broadband standards, IDC expects worldwide interoperability for microwave access (WiMAX) in the Philippines to seriously get back into the game in 2009. The precursors are technological developments in the device, rising demand for wireless broadband and growing requirement of some major players to differentiate themselves from more successful competitors;
7) Crisis management through managed services. The main value proposition of managed services is the ability to provide the latest technologies and manpower skills at a cheaper cost compared to investing in an in-house facility and staff. In 2009, managed services is expected to increase as it becomes an attractive alternative for enterprises waiting out the economic uncertainties;
8) Popularity of mini-notebooks will spawn more dynamic go-to-market strategies. The 2008 Philippine client PC market was primarily characterised by excitement and interest over the proliferation of competitively priced mini-notebooks. IDC predicts that this trend will transform the marketing strategies of PC vendors in 2009. In a highly price-conscious market such as the Philippines, vendors are expected to gravitate towards highly dynamic strategies such as service bundles with telco operators and various aggressive product bundling schemes;
9) Vertical view - opportunities will rise in the face of adversity. Undeniably, the impact of the global economic crisis has already taken a toll on IT spending in several vertical industries in the Philippines. IDC believes that with the economic downturn businesses will strive to achieve greater efficiency and look for products and services that will significantly reduce costs. Verticals such as the Financial Services Industry (FSI), retail and wholesale distribution, communications and media, manufacturing and services, will likely focus on security, risk management, data management, inventory system and Customer Relationship Management (CRM); and
10) End-users will proactively seek out alternatives. With the tightening of budgets, IDC anticipates a higher preference, if not a deliberate search, by end-users for alternatives that offer better value come 2009. Although cost will remain the primary factor in buying decisions, end-users will be extra careful when evaluating alternatives and their shrewd selection process will range from choosing the better package bundle to picking out a particular product that gives excellent after-sales support. IDC believes that even in trying times, end-users will not completely cut their telco and IT spending activities but rather re-evaluate their positions and actively seek alternatives. In response, ICT vendors need to be more flexible in offering product and service packages, while taking into account key seasonal trends, wild-card events, unforeseen issues, and the buying and adoption behaviour of Filipino ICT users.
* IDC's annual Predictions for the ICT Markets in the Philippines draws upon latest IDC research and a worldwide brainstorming exercise among IDC's 900+ analysts. This was followed by an extensive regional review to weigh in on key industry events, user trends, vendor strategies and economic measures that promises to uniquely define the technology trends which can impact and drive the ICT market in the Philippines for 2009. Across the globe, following the release of IDC's global top ten and IDC's APEJ top ten, geographic and technology teams will be releasing their own specific predictions in the up coming months.
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