SMB spending to increase in 2004

A recent research study of Canadian businesses reveals IT spending in 31 per cent of SMBs will increase in the next 12 months. There is virtually no change from last year in projected IT spending as a proportion of revenue over the next year, most respondents predict they will spend five per cent or

less of their revenues on IT products and services.

For the vast majority of SMBs, staying competitive, improving productivity, and reducing costs are the biggest business challenges. Each of these challenges are considered important by 85 per cent or more of respondents.

In Selecting a supplier, technical support and product knowledge is key. Supplier loyalty remains strong. Of those businesses, which deal primarily with one IT supplier, 42 per cent have been dealing with that supplier for over five years.

Close to half (44 per cent) of SMBs currently outsource their web site hosting. The outlook for service spending over the next twelve months is not promising. Virtually every service is expected to weather a slight drop in usage.

Online purchasing has increased since last year. Growth is to be expected as online payment systems become more sophisticated and easier to use for buyers. However, three quarters of SMBs that make online purchases use the Internet for five per cent or less of their total purchases.

The Canadian SMB Study: 2003 tracks purchasing practices, current hardware installations and future acquisitions, instillation and maintenance, service and Internet/E-commerce usages.

Canadian Computer Display Market

The overall display market finished Q3-2003 with approximately 605,600 units shipped, which represented a decline of four per cent over Q3-2002.

Cathode ray tube (CRT) vendors continued to experienced product interest declines in Q3-2003. Total shipments were 411,100 and revenues were $81.4 million, declines of 23 per cent and 37 per cent respectively.

Total shipments were up an estimated 93 per cent annually in the LCD market, as vendors shipped 194,500 units. The 15-inch LCD segment accounted for the bulk, 43 per cent, of LCD shipments.

The unbelievable growth was witnessed in the 19-inch LCD segment, as unit volume catapulted 1,108 per cent over Q3-2002. Total LCD revenues were $109.8 million, up 35 per cent from last year.

Canadian Networking Market

Signs are finally appearing to suggest the recession in the Canadian networking market has bottomed out. During Q3-2003, revenues from networking equipment were five per cent higher than in Q2-2003.

On a year over year basis, the market still declined by eight per cent during Q3-2002.

During the last two years the downturn in sales of Telecommunication Carrier equipment has been much more severe than was the case for Enterprise products.

Today the telecommunications market is dominated by the same carriers, albeit with different names in most cases, that dominated the market before the Internet boom began. The current generation of management is less concerned with fending off the competition than it is with reducing capital expenditures in order to keep stock prices up.

Canadian White Box Made in Canada Market

Aggressive price pressure particularly in the desktop and commercial markets punctuated third quarter activity in both the overall PC and white box arenas.

More affordable, computers did result in increased unit sales but did not necessarily translate to profitable positions for the players involved.

The third quarter was up both sequentially and year over year in Canada. Results for Q3 2003 showed an absolutely stellar 23 per cent increase quarter over quarter compared to Q2 2003.

A new record of 422,100 units were shipped.

Canadian Handheld Market

Shipments were up five per cent from the second quarter of this year, as vendors finished with approximately 67,800 units.

Vendors reduced inventory levels in the third quarter to make room for the startling number of new product announcements at the beginning of Q4-2003.

Palm products remained the most popular throughout the quarter, accounting for 79 per cent of both unit and revenue activity.

The communicator device segment experienced tremendous interest in the third quarter of 2003, as unit activity jumped 113 per cent up over Q2-2003 to finish with 14,666 units.

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Jim Love, Chief Content Officer, IT World Canada

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