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Global Stimulus Reshapes Communication Equipment MarketsIt is now clear that the world economies are not decoupled from those of the United States and Europe. Governments in many of the emerging markets are implementing fiscal policies to support economic recovery. Among the emerging markets, China and other APAC countries have been very aggressive in introducing and implementing spending programs. As with the United State, these spending programs imbed capital expenditure for revamping infrastructure that requires massive information technology and communication equipment investment.Given the importance of China and other APAC countries in the global markets, and the same key point in most of theses countries—i.e. the economies are distressed by decreased liquidity and the shortage of credit, and declining export demand from key markets (United States and Western Europe)—the spending packages are crafted to support those sectors that are cyclical and have been impacted severely from the global slowdown. APAC is highly export dependent, approaching up to 50% of gross domestic product across the region. The sectors in the real economy that are experiencing the greatest impact include manufacturing, transportation, retail, construction, and energy. In response, various fiscal policy programs are designed to directly impact these industrial sectors and rescue them from the global financial crisis. IHS Global Insight utilizes public and private data sources and sophisticated modeling methodologies to construct usage intensity factors across networking technologies by country, vertical, and size segment for the enterprise market. Along with IHS Global Insight's latest macroeconomic, industry, and global ICT forecasts, these factors are used in the segmentation models. They are updated based on changes in economic activity, implementation of economic policy, and more recent data availability. The spending programs in the Unites States and China are expected to direct infrastructure expansion. The impact across capital spending will not be uniform by the investment type. In the networking technology market, the ranking of core product intensity will be impacted less compared to the emerging technologies. The potential growth for emerging technologies will be higher due to existing vast core infrastructure technologies and emergence of second-generation networking products. With the broad incentives of concentrating on virtualization, collaboration, and mobility, IHS Global Insight foresees shifts in usage rankings of security, unified communications, wireless, and services components of the networking technology. The following tables exhibits shifts in ranking of China and United States emerging network technology markets, following the stimulus package implementation. The tables exhibit relative intensity factors of usage by technology and vertical. The new stimulus package is introducing massive spending plans for the transportation and energy verticals, hence changing the ranking of these industries. 
Mohsen Bonakdarpour Senior Principal Technology Markets Mohsen.Bonakdarpour@ihsglobalinsight.com +1 610 490 2667 |
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