Global Information Communication Technologies Report

Global Information & Communication Technologies Report

What to watch ?

  • Successful launches of new products and services which make current products obsolete
  • Frequent mergers & acquisitions weakening medium-sized companies 
  • The current phase of digitalization could increase the risk of an IT services bubble
  • Lasting price pressures despite robust innovation 

Information & Communication

Technologies id card

Fragmentation
Fragmentation-3 
Internationalization
Internationalisation-3 
Capital Intensity
Capital-intensity-2 
Profitability
Profitability-2 

Sector risk map: Information Communication Technologies

Long-Term GROWTH SUSTAINED BY DIGITALIZATION   

The Information and Communication Technology sector (ICT), comprising a wide range of activities from electronic components to telecommunication services, grew steadily at +2.5% in 2015 and will rise by +2.7% in 2016.
Being the bedrock of innovation and the source of a multitude of game-changing products, the sector’s influence goes far beyond its estimated 6% share in global GDP. 
At present, the services segment (70% of sales) and Asia (37% market share) are the two main drivers. Expect IT services, which grow faster than other segments and are less risky to be boosted by the digitalization of the economy.    
Digital innovation revolutionizes the value chain and promotes new actors while the smart-cities trend offers opportunities for new services and operators. 
Despite its apparent maturity, the sector remains under constant pressures from: (i) declining prices; (ii) the need to constantly renew the goods and services offered; and (iii) relations between manufacturers and service providers. 

Key Players

Country

Role

Sector Risk

UNITED-STATES #2 Exporter
#2 Importer
#3 Producer
Dot-Risk-low
China #1 Exporter
 #1 Importer 
#1 Producer
Dot-Risk-medium
Japan #3 Producer
#6 Importer
Dot-Risk-low

Strengths

  • High capacity to innovate
  • Widespread adoption of new technologies
  • Driver of growth and productivity of the global economy
  • Increasingly interconnected systems and objects (“Internet of Things”)

Weaknesses

  • Low value-added for a few standard products
  • Consolidation in IT services comes on the heels of growth boosted by digitalization
  • Retailers and manufacturers have unequal purchasing powers
  • High R&D intensity

INFORMATION & COMMUNICATION TECHNOLOGIES Subsectors Insights

Network equipment: A highly competitive market with sustained expected growth. Network equipment is required to support widespread adoption of technological advancements related to big data and cloud computing.

 

Services: Huge demand spurred by the digitalization of the economy, yet suffering from price pressures.

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