Security and economic concerns restrain IT demand

3-Feb-2008
By Samantha Whybrow

Imports of PCs to Sri Lanka are being curtailed by increases in defence spending, inflation, and interest rates, according to a leading IT market research company.

While, overall imports in Q3 of 2007 showed a year-to-year growth rate of 13.5%, this figure could have been higher, if not for the prevailing conditions in the country.

“An increase in defense [sic] spending, as well as rising inflation and interest rates has contained the overall IT demand in the country,” reports Springboard Research, in a statement released on Tuesday [29]. According to the researchers, the prevailing security and economic situation in the country means organisations are putting IT expenditure on hold.

“Many organisations in the SME segment have put their current IT spending on hold and are waiting for the country’s overall security and economic situation to stabilize. Even the education sector is continuing to witness a decline in its overall ICT spending,” said an analyst, Shipra Sanganeria, in a statement released by the organisation.

However, Sanganeria predicts spending may pick up amidst government plans to develop the ICT sector.
Local brands Maya and Panora recorded remarkable growth in Q3. However, it was the major brands, such as HP, Dell and Lenova, which continued to dominate the market.

HP held a market share of 17.7%, according to the researchers.
The householder segment was the key driver in the recorded growth, making up 23.2% of the 56,806 shipments to the island in Q3.Demand from the telecom, banking, and healthcare sectors were the next most important determinants of growth during that time period.

“The continued growth in the home sector is mainly due to the increased vendor focus on the consumer segment, along with the IT literacy drive by the government and ICTA,” said Sanganeria.