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EITO members and sponsors
EITO members EITO sponsors
EITO 2004
Presented by
Bruno LamborghiniChairman of EITO
EITO 2004
Out of the tunnel!
Strengthening signs of growthin the worldwide ICT market,
however, recovery is still too slow and uncertain in many European countries
Main drivers reinforcing growth in 2004-2005
Broadband diffusion, both wired and wireless
Integrated networks for E-business andE-government
Increased digital convergence in consumer markets
New digital content and services
ICT as main driver for productivity gains in the US, but not yet in most European countries
Correlation coefficient = 0.66; T-statistic = 3.03Source: OECD , ICT and economic growth, 2003
Pick-up in MFP growth and increase in ICT investment
Spain
Germany
France
Japan
Italy
Austria
Netherlands
United StatesCanada
Australia
Sweden
Denmark
Finland
Ireland
0
2
4
6
8
10
12
14
-1.5 -1.0 -0.5 0.0 0.5 1.0
Change in MFP growth from 1980-1990 to 1990-2000
Ch
an
ge
in IC
T in
ve
stm
en
t a
s %
of
GF
CF
, 1
99
0-2
00
0
How to take full benefit from ICT investment
OECD analysis certifies Europe‘s need to:
Remove unfavourable market conditions and
Promote „related factors“ such as
Education and training for high quality skills
Reorganisation of labour market and public administration
Effective competitive environment
E-business diffusion among SMEs
Europe must not lose momentum at the beginning of a new ICT development cycle
Potential to become a prosperous knowledge society of 500 million people
Should not miss new ICT cycle driven by North America and East Asia
EU enlargement brings new expectations and challenges, both for new and old member states
Relaunching Lisbon
Achievements, but also delays regarding the target set in Lisbon for 2010
Need to relaunch the Lisbon programme through:
Focusing more on targets/parameters and defining implementation processes
Monitoring and benchmarking progress
Defining and verifying accountability
Enhanced policy actions should be focused on
Human resources as main strategic asset
Main infrastructures: Broadband and DTV
Main professional applications: E-business, Ecosystems and E-government
Main consumer applications: digital content and services
Western European ICT market growth 1995-2005, in %
Source: EITO in cooperation with IDC Market value 2004: 611 billion Euro
9.3
7.98.5
6.78.0
8.6
12.7
10.1
13.4
10.8
14.5
12.0
4.2
1.3
2.6
-3.4
2.7
-1.2
3.8
2.4
4.3 4.4
-5
-3
-1
1
3
5
7
9
11
13
15
17
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
TLC IT
Western European ICT market growth by segment 2003-2005, in %
Source: EITO in cooperation with IDC Market value 2004: 611 billion Euro
-6.1
1.1
2.51.4
3.0
5.0
-4.4
2.0
5.14.0 4.3 4.2
-8
-6
-4
-2
0
2
4
6
Computer hardware
Software &IT services
Telecommunicationsequipment
Carrier services
2003 2004 2005
Western European IT market growth by country2004-2005, in %
Market value 2004: 294 billion EuroSource: EITO in cooperation with IDC
1.2
3.02.4
4.3
2.4
4.3
1.7
4.1
5.4
7.7
2.9
5.8
3.2
4.6
2.4
4.4
-3
-1
1
3
5
7
9
Germany France UK Italy Spain Benelux Nordic WesternEurope
2004 2005
Western European telecom market growth by country2004-2005, in %
Market value 2004: 317 billion EuroSource: EITO in cooperation with IDC
3.73.4
3.0
3.84.1
4.7
3.9
4.9
5.66.8
3.5
4.03.7
4.5
3.8
4.3
0
1
2
3
4
5
6
Germany France UK Italy Spain Benelux Nordic WesternEurope
2004 2005
EU enlargement* – IT and TLC markets in 2003
* Excludes Cyprus and Malta
Source: EITO in cooperation with IDC
CountryIT spending in € million
IT/GDP in %
CAGR 2005/2003
in %
TLC spending in € million
TLC/GDP in %
CAGR 2005/2003
in %
Czech Republic
2,620 3.3 8.7 3,930 5.0 2.8
Estonia 216 3.1 6.5 524 7.5 6.5
Hungary 1,956 3.5 10.0 4,001 7.2 4.2
Latvia 220 2.5 9.4 670 7.6 5.6
Lithuania 257 1.7 12.5 787 5.0 7.8
Poland 3,992 2.0 12.0 10,816 5.4 7.7
Slovakia 757 2.4 9.2 1,255 4.0 2.1
Slovenia 507 2.1 8.8 978 4.0 2.0
Total 10,525 3.0 11.0 22,961 5.8 6.5
Web users and web buyers by country, 2003-2007
Web users by country in million Web users as % of population
Source: EITO in cooperation with IDC
Mobile subscriptions by country in thousands,2002-2006
Source: EITO Task Force
1 Includes also Turkey2 Geographical demarcation
Mobile workers
Source: EITO in cooperation with IDC
Mobile applications,being available anywhere and anytime
Mobile E-mail
Mobile sales force automation
Mobile supply chain automation
Mobile directories
Mobile cooperative
Mobile customer support
Mobile payment and M-commerce
ADSL lines by country in thousands, 2002-2006
Source: EITO Task Force
1 Includes also Turkey2 Geographical demarcation
Consumer Electronics (CE) market in Western Europe
in million units, 2003-2004Product 2003 2004 2004/03 in %
Cathode ray tube TV (CRT TV) 24.4 23.6 -3.0
Advanced TV (flat screen) 1.4 3.0 112.8
Digital video discs (DVD) 24.1 26.3 8.8
Video cassette recorders (VCR) 8.4 6.3 -25.3
Camcorders (CCR) 3.5 3.6 0,1
Digital still camera (DSC) 15.5 21.7 40.1
Set-top boxes and kits 5.8 6.0 3.8
Digital personal audio 13.8 16.1 16.2
MP3-format-based digital personal audio sets 1.1 2.3 111.1
Home cinema systems 3.5 4.8 35.4
Audio home systems andseparate Hifi elements 15.5 14.5 -6.4
Game consoles 12.7 13.1 3.9
Total value in € billion 44.5 46.3 4.2
Of which: Digital products 52% 58% 17%Source: EITO 2004 special study
E-business as key area for European enterprises
Continuous web-enablement of enterprise applications
Implementation and integration of process-oriented applications (SCM, PLM)
Adoption of technologies based on Internet protocol
Demand for business intelligence tools/solutions
Adoption of Web services standards for connectivity
Challenges:
Budget-related constraints
Focus on ROI and cost saving
Search for real value leveraging on existing investment
Pragmatic step-by-step implementation
Limited IT services growth due to:
Demand for cost control
Focus on core competences
Outsourcing operations (shift to offshore services)
System integration focused on solid ROI and tangible business value
Opportunities and challenges for European SMEs
IT spending by company size in 2003:
1-99 employees 28%
100-499 employees 26%
500 employees and more 46%
SMEs approach to ICT (20-499 employees):
Laggards 36%
Wait and see 29%
Fast followers 17%
IT-oriented 18%Source: EITO in cooperation with IDC
EITO 2004 special study: Convergence and the digital world
Current and future technological convergence accelerates the adoption of new applications, devices and infrastructures.
Convergence drives the realisation of a digital world and challenges present and new business players.
New digital value chains are changing traditional business models and processes.
Most effective convergence relates to digital content, services and business processes, mostly aimed at the end user.
Source: EITO 2004 special study
Convergence and the digital world - definition
The phenomenon by which the evolution and/or the integration of technologies with different origins allows infrastructure, delivery devices and applications to provide existing or new functionality.
Convergence enables providers to satisfy existing demands more efficiently or conveniently or supply entirely new products and services.
Source: EITO 2004 special study
The digital world value chain
Source: EITO 2004 special study
Three convergence scenarios
Source: EITO 2004 special study
Drivers and inhibitors of convergence
Source: EITO 2004 special study
Convergence in infrastructure
Limited convergence due to different standards and networks
Convergence around seamless digital networks (Internet protocol) with implications for standards definitions and cross-network communication
New investment driven by VoIP and mobile Internet applications
Source: EITO 2004 special study
Convergence in delivery devices
Limited convergence due to depressed market places and constraints for components (battery life, unit size and cost of new chipsets)
End-user reluctance to accept converged devices Limited common functionalities Failure of some products
Source: EITO 2004 special study
Convergence in communications
Convergence takes place in communications applications, which were historically separated, and will accelerate as soon as IP becomes a dominant network carrier
Present converging killer applications: SMS/MMS and Email
Source: EITO 2004 special study
Convergence in information and entertainment
High degree of convergence due to ability to use digital distribution availability of fast infrastructure connected to an
increasing number of delivery devices
Highly successful second generation online music delivery (which will be followed by online video delivery)
Other successful areas: news, Internet browsing and online gaming
Main obstacles: content piracy (music) and end-user reluctance to pay for virtual entertainment
Source: EITO 2004 special study
Convergence in transactions
Strong area of potential convergence, driven mainly by the business sector while consumers will follow
Few integration constraints and open standards
Benefits Reduced costs Improved services Efficiency Corporate responsiveness
Source: EITO 2004 special study
Conclusions
New communication technologies, media and devices as well as the Internet are meeting latent consumer and business needs for seamless, simple and useful digital tools.
An increased number of interested commercial parties, combined with cultural, economic and social changes, will drive the emergence of a true digital world over the next five years.
Plenty of opportunities for digital content and services providers and for digital network operators in Europe.
Need to clarify intellectual property rights‘ rules favouring market development.
Need to promote investment and entrepreneurship exploiting the digital world value chain and opening new market opportunities.
Source: EITO 2004 special study