After contraction in ----, BMI forecasts a return to growth for the Japanese IT market in ----and we anticipate expansion of -.- in local currency terms to almost JPY--.-trn. The hardware segment is expected to return to modest growth in ---- in local currency terms, and grow by double-digits in US dollar terms due to strong yen appreciation following the BoJ s move into negative rates in H---. ...The hardware segment is expected to return to modest growth in ---- in local currency terms, and grow by double-digits in US dollar terms due to strong yen appreciation following the BoJ s move into negative rates in H---. Volumes should grow in ----, but this is only from the lows of ---- when replacement sales declined sharply as demand was concentrated in ---- by the withdrawal of Microsoft support for XP, and we expect growth will be subdued in ---- in what is a largely saturated PC market. It should also be noted that the enterprise IT infrastructure market will continue to be muted as a shift to cloud services dampens spending on in-house infrastructure. BMI expects stronger performance in terms of software spending growth in ----, as we forecast the software market will grow by -.- in local currency terms to JPY-.-trn. The enterprise software market will register the strongest spending growth, with data analytics spending expected to be strong again in the large enterprise market, while on-demand cloud software delivery models continuing to deepen the small-
...Computer Hardware Sales: JPY-.-trn in ---- to JPY-.-trn in ----, a compound annual growth rate (CAGR) of -.- . After a bump in growth in ---- due to yen appreciation we expect a largely flat market due to market maturity, demographics and competition from smartphones that will mean longer replacement rates and potentially replacement cannibalisation. ...Computer Hardware Sales: JPY-.-trn in ---- to JPY-.-trn in ----, a compound annual growth rate (CAGR) of -.- . After a bump in growth in ---- due to yen appreciation we expect a largely flat market due to market maturity, demographics and competition from smartphones that will mean longer replacement rates and potentially replacement cannibalisation. Software Sales: JPY-.-trn in ---- to JPY-.-trn in ----, a CAGR of -.- . Enterprise modernisation is creating opportunities where software spending is still low as share of revenue compared to other developed market such as the US. IT Services Sales: JPY-.-trn in ---- to JPY-.-trn in ----, a CAGR of -.- . Performance will depend on Japanese enterprise investment trends, but our core view is for segment outperformance based on uptake of cloud computing and Internet of Things services, and this is one area where Japan s demographics could prove a positive, for instance in telehealth.
...BMI View: We forecast Japanese IT market spending will increase at a CAGR of -.- in local currency terms throughout the --------- period. This is an upgrade on our previous forecast, resulting from the positive impact of yen appreciation on the hardware market in H---. ...
