The Apex Group :: EMEA Update Corner: Growth of Emerging Markets

EMEA Update Corner: Growth of Emerging Markets

The credit crisis of 2009 created a severe decline in all sectors of the global economy, however, through these uncertain times the technology sector and the demand for technology was able to weather the storm. Being in the tech industry for over a decade, I think a key lesson from this crisis is that while consumers and enterprises are willing to reduce spending on products from other sectors, technology is less affected.

Outside of the US, and specifically in emerging markets in EMEA, this inelastic demand is especially prevalent. The latent demand for investment in IP infrastructure, mobile services, e-government have made the emerging markets in EMEA one of the most attractive market places for ICT companies' expansion efforts.

Gartner's 2010 report shows that while global IT spending will grow at 4.6%, the Middle East and Africa will grow at 7.7% - the second highest region worldwide.
In a Fortune/CNN Money article IT companies with steady growth over the past few years are focusing "on developing countries where economic growth remains strong. At IBM CEO Sam Palmisano late last year announced intentions to invest $1.6 billion in 50 developing countries, and that's not including Brazil, Russia, India, and China."

Most of this regional ICT growth is driven by economies that are still growing at a faster pace than the EU and US despite the financial crisis. Having been traditionally detached from the credit markets for so long, cash heavy economies – especially oil producing countries like Saudi Arabia, Algeria and Russia – are investing in their countries' infrastructure and private markets.

In its latest "World Economic Outlook Update, the IMF said it sees the region's economies expanding by 4.5 percent this year and by 4.8 percent next year as it continues to recover from the downturn in 2009 which saw growth stifled to just above two percent."

Best of all, the growth in emerging markets in EMEA ranges across the technology sector from fiber investments to online gaming and smartphones to computers.

In its December 10th, 2009 report Pyramid Research found that over the next 5 years growth in smartphone sales in Africa and the Middle East will grow a 39% CAGR.
Gartner analyst Ranjit Atwal says: "The PC market in countries such as the UAE, Saudi Arabia and Kuwait is showing an upward trend. The global financial crisis has had less effect on the consumer PC market in the Middle East than elsewhere." According to research firm Gartner, the Gulf consumer PC market grew by 15% in the second quarter of this year, with the sector overall growing just 5%.

These very positive economic indicators from the emerging markets in EMEA and the continued growth in IT spending prove that even in a depressed global economy, there are always multiple ways to expand sales. The key is to find the right markets and reaching them quickly and cost-effectively.

Sincerely,

Alex Giannikoulis

Apex Group
Owner, CEO

Web design provided by Ink Stain Design.





		EMEA Update Corner: Growth of Emerging Markets The credit crisis of 2009 created a severe decline in all sectors of the global economy, however, through these uncertain times the technology sector and the demand for technology was able to weather the storm. Being in the tech industry for over a decade, I think a key lesson from this crisis is that while consumers and enterprises are willing to reduce spending on products from other sectors, technology is less affected. Outside of the US, and specifically in emerging markets in EMEA, this inelastic demand is especially prevalent. The latent demand for investment in IP infrastructure, mobile services, e-government have made the emerging markets in EMEA one of the most attractive market places for ICT companies' expansion efforts. Gartner's 2010 report shows that while global IT spending will grow at 4.6%, the Middle East and Africa will grow at 7.7% - the second highest region worldwide. In a Fortune/CNN Money article IT companies with steady growth over the past few years are focusing "on developing countries where economic growth remains strong. At IBM CEO Sam Palmisano late last year announced intentions to invest $1.6 billion in 50 developing countries, and that's not including Brazil, Russia, India, and China." Most of this regional ICT growth is driven by economies that are still growing at a faster pace than the EU and US despite the financial crisis. Having been traditionally detached from the credit markets for so long, cash heavy economies – especially oil producing countries like Saudi Arabia, Algeria and Russia – are investing in their countries' infrastructure and private markets. In its latest "World Economic Outlook Update, the IMF said it sees the region's economies expanding by 4.5 percent this year and by 4.8 percent next year as it continues to recover from the downturn in 2009 which saw growth stifled to just above two percent." Best of all, the growth in emerging markets in EMEA ranges across the technology sector from fiber investments to online gaming and smartphones to computers. In its December 10th, 2009 report Pyramid Research found that over the next 5 years growth in smartphone sales in Africa and the Middle East will grow a 39% CAGR. Gartner analyst Ranjit Atwal says: "The PC market in countries such as the UAE, Saudi Arabia and Kuwait is showing an upward trend. The global financial crisis has had less effect on the consumer PC market in the Middle East than elsewhere." According to research firm Gartner, the Gulf consumer PC market grew by 15% in the second quarter of this year, with the sector overall growing just 5%. These very positive economic indicators from the emerging markets in EMEA and the continued growth in IT spending prove that even in a depressed global economy, there are always multiple ways to expand sales. The key is to find the right markets and reaching them quickly and cost-effectively. Sincerely, Alex Giannikoulis Apex Group Owner, CEO
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