July 20, 2011 -
PRLog -- Market Overview The French IT market is the third largest in Europe and, despite current economic headwinds, is projected to grow at a CAGR of 3% over 2011-2015. The addressable French market for IT products and services is projected by BMI to reach US$50.0bn by 2015. The IT market showed signs of stabilisation in 2010, with a strong rebound in PC sales in H1, after a sharp contraction in 2009 due to the economic crisis, which hit business spending in particular. The first half of 2010 saw new IT services deals in sectors such as energy, telecoms and banking. Despite the tightening of government purse strings, government agencies such as the Social and Health Ministry also commissioned projects. In our core IT forecast scenario, IT market growth will be around 3% in 2011. Vendors will look to key segments such as telecoms, banking and energy where most opportunities are likely to be generated. Key drivers will include growing mobile and fixed broadband penetration, product innovation such as featurerich netbooks, technology innovation such as GSP technology and services, and the broader economic recovery. Industry Developments In February 2009, the Riester Report on the development of the digital economy was presented to relevant government ministers. The report was the product of a special working group of eight experts convened to consider digital economy issues. The report contained 25 proposals for action to improve the relationship between the government and citizens and promote innovative services. In January 2010, the French government issued computer users an advisory warning to change from Microsoft's Internet Explorer browser. The government was responding to widespread concerns about security issues surrounding the Microsoft browser. Competitive Landscape In November 2010, French retail leader Carrefour announced plans to launch the iPad in around 70 of its domestic stores by the end of 2010. The device was launched in 15 stores in November, making Carrefour the first French hypermarket to stock the iPad. Meanwhile, mobile operator Orange revealed it was planning to sell a 3G Android-based tablet made by an unnamed Asian original equipment manufacturer (OEM) under the Orange brand. Traditional telecoms service providers are moving into the IT services space, a trend well established in the global IT market in 2010. In August 2010, Orange Business Services announced it had acquired leading French IT integrator Alsy for an undisclosed amount. Orange hopes the acquisition will help it take a dominant position on the French market for Microsoft solutions integration as it competes with companies such as Atos Origin and Capgemini. In October 2010, French IT and telecoms service provider announced that, as a development of its partnership with Microsoft, it was launching a cloud computing service called Flecs. Meanwhile, in June 2010, HP announced it was helping leading French telecom operator SFR extend a cloud computing offering to its 150,000 business customers. Computer Sales According to BMI figures, France's addressable computer hardware market will be worth around US$9.6bn in 2011, up by an estimated 7% from US$9.3bn in 2010. Total PC revenues including notebooks and desktops are estimated at US$7.5bn and are expected to rise to US$8.6bn by 2015 at a CAGR of 3%. In 2011 the French computer hardware market is expected to record single-digit growth, consolidating a recovery in shipments in 2010. One additional driver both of increased notebook sales and lower prices is the move of telecoms operators into the PC retail space. With increasing mobile and fixed broadband penetration, notebooks and netbooks have become popular wireless connectivity options for French consumers. Software In 2011, French software sales are projected by BMI at US$13.1bn and, despite the uncertain economic conditions, revenues are forecast to rise to US$15.0bn in 2015. Software CAGR for 2011-2015 should be about 3%. Migrations to Microsoft's Windows 7 operating system, and cloud computing services, should be among areas of opportunity in 2011. The French market remains focused on traditional embedded software rather than software-as-
a-service. However, French internet service providers (ISPs) continue to roll out hosted software offerings and double-
digit growth is expected in this area. Services French IT services spending is forecast to reach around US$20.9bn in 2011, up from US$20.3bn in 2010. Demand for IT services stabilised in H110 after the economic crisis had an impact in 2009 when projects were put on hold. Sectoral CAGR is projected at 3% over the forecast period, as the market approaches US$24.0bn by 2015. BMI estimates the addressable IT services market will grow by around 3% in 2011. IT services account for around 48% of total French IT spending. The most severely hit area during the economic slowdown were softer project-type spending such as consulting and software development. E-Readiness Thanks to the extensive reach of traditional copper plant and cable TV networks, fixed-line infrastructure is widely available in France, even in rural areas. This means operators are finding it relatively easy and cost-effective to deliver broadband services to a large number of customers (although rural parts are still being neglected). In addition, France has a high GDP per capita, which bodes well for ensuring robust spending among subscribers. France has just three mobile network operators and is one of the least competitive mobile markets in the region. This has resulted in significantly higher and more stable average revenue per user (ARPU) rates and mobile penetration that is still below 100%, providing better subscriber growth opportunities.
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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at
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