Computer Global Market
Insights and Opportunities
Overview: Estimated at $145 billion in 2008, the French market for information and communication technologies - which includes computer hardware/software, telecommunications and electronic components – is growing at a rate of 5% per year. One third of this market is related to telecommunication services, and two thirds to computer hardware as well as software and related services.
The computer & peripherals market has grown by 6% in 2008. The market is driven by the sale of consumer electronics, including smart phones, I-mode, 3G and PDAs. The level of penetration in individual homes exceeds 50%.
About 33 million French people - or about 62% of the total population - can access the Internet, including 28 million through a high-speed connection. More than one household out of two – or 14 million households – can access the Internet from the home. More than 80% of the French also own a subscription to a mobile phone. Thanks to HSDPA/3.5G technology, 2008 has seen the advent of revolutionary tools that will enable phone users to surf the Internet faster and do on-line transactions as well as watch TV from their telephone.
The French public sector has greatly contributed to the boost in IT sales, as it currently represents 6% of total IT investments. Launched in January 1998, the Government Action Program for an Information Society (PAGSI) is investing billions of dollars in the automation of VAT declaration, customs declaration, the filing of social contributions by employees. As a result, over 7 million French tax-payers – or 11% of the overall population – filled out their income tax return on the Internet in 2007.
France is perhaps more than any other country in Western Europe on the threshold of the new Internet and mobile revolution; it is accelerating rapidly as one of the top leaders in the new high technology era. The European Association for Competition in Telecommunications announced that France had become the largest broadband market in Europe. Revenue from these high-speed subscriptions alone already exceeds $2 billion annually. In France the overwhelmingly dominant mode of broadband connection is ADSL, representing 94% of broadband connections and 97% of growth.
Estimated at $750 million, the server market has grown by 5% in 2008. French corporations continue decreasing expenditures related to maintenance and platform administration and supervision while increasing expenditures related to information system’s availability, security and quality of service.
The five top server manufacturers are IBM (31.1%); Hewlett-Packard (28.3%); Dell (11.6%); Sun Microsystems (12.8%); and Fujitsu-Siemens (4.1%). While IBM and Dell have known a significant growth in revenue (13.8% and 14.1%), the three others have stagnated or regressed.
After five years of growth at a rate of 15%, the PC market has been hit by a sharp drop that affected both consumer and professional applications during the fourth quarter of 2008, which brought its growth down to 10%. The only market segment that has continued growing steadily is that of Netbooks, which represent 3% of the total PC market. About 53% of the PC’s being sold are now notebooks rather than desktops. The PC market is dominated by ACER (16.1%); HP (19.4%); Dell (10.4%); Asus (3.4%); Toshiba (5%); others (45.7%).
The French printer market is dominated by HP, with 44.1% of this market, followed by Canon (15.8%); Epson (12.7%), Lexmark (7.6%) and Brother (6.1%).This market is estimated at $2 billion. The average price for a printer is about $200. The market for Inkjet printers has dropped by a third since 2002. This market is estimated at $250 million. The sale of laser printers grew in volume by 10%. Multifunction printers represent a $750 million market.
Flat vs. CRT Monitors
While only 20 percent of panel displays – 576,000 out of total of 3.3 million - were LCDs four years ago, this rate has gone up to 90 percent now, with over 5 million units being sold. Meanwhile, average pricing for LCDs has decreased threefold to reach $200.
This dramatic drop in pricing has affected manufacturers’ revenue, which dropped in 2007 and 2008 while volumes kept rising. Market value for LCDs went from $4.01 billion in 2004 down to $1.5 billion in 2008.
According to market consulting firm Gfk, the French Consumer Electronics market is estimated at $25.3 billion, against $26.6 billion in 2007. Only electronic games which represent 8% of the overall market continued growing by 19% in value. TV’s, DVD’s, Stereo sound systems and Walkman’s, which represent 38% of the global market dropped by 6% in value and 7% in volume. IT products (desktop, mobile PC’s and Netbooks) represent 34% of this market and dropped by 5% in value while growing by 15% in volume. Cameras and mobile phones, which represent respectively 9% and 12% of the market, dropped by 2%. Camera equipments grow by 3% in volume while mobile phones grow by 1% in volume.
Flat TV screens representing 75% of total TV sales. LCD screens represent 85% of these sales. The vast majority of panels are now full-HD. Sale of stand-alone GPS devices dropped by 6%, however, there will be a 6.4% increase in mobile and Smartphones equipped with a GPS. However, while the value of goods dropped by 10-15%, demand increased by 30-35 %. For example the drop in prices for notebooks averaged $260.
Opportunities: GPS mobiles and Smartphones; Net books; Portable devices (laptops, palm tops, Smartphones, etc.); Wireless solutions; I-mode related products; and Portable storage devices (USB keys, hard-drives, etc.).
The ATAWAD (i.e. “anytime, anywhere, any device”) era causes the French to increasingly seek portable solutions that provide them with permanent access to data across the Internet, whether personal or professional. The market for devices such as laptops, palmtops, and blackberries is therefore growing very rapidly. Great opportunities are also available for wireless solutions both for the home and the office, especially with the advent of 3G high-speed mobile Internet bandwidth.