IT Spending Slowdown Not Affecting Smartphone Purchases
Published on: 22nd Nov 2008
Note -- this news article is more than a year old.
A new ChangeWave corporate IT purchasing survey shows an accelerating collapse in U.S. business spending that has now reached historic proportions with record pullbacks occurring both in the current 4th Quarter and going forward.
In one of the survey's few upbeat findings, the corporate smart phone market continues to show growth - with Research In Motion maintaining its huge lead, and Apple continuing to make inroads into small to medium-sized businesses.
A total of 1,926 respondents involved with IT spending in their organization participated in the survey, conducted November 6-12, 2008.
IT Spending Breakdown
The results show IT spending projections for 1st Quarter 2009 to be the worst ever for a ChangeWave survey, dating back to 2001. An unprecedented 45% of respondents say their company's IT spending will decrease (or there will be no spending at all) in the 1st Quarter - 16-pts worse than our previous survey.
Only 10% say spending will increase - a 3-pt drop from previously.
"The IT purse strings are almost completely on lockdown," said Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing, who added, "At the very least, these results do not bode well for a 1st half 2009 economic upturn."
Not only is IT spending plunging, but it comes at a time of year when there are normally seasonal increases. This becomes immediately apparent when you look at the change from each November - beginning with November 2003 - in the Projected IT Spending chart above.
The survey also asked respondents if their IT spending was on track thus far in the current 4th Quarter. By a wide margin, these results are also the worst on record - with 39% saying they've spent "Less than Planned" so far this quarter - 9-pts worse than in our previous survey. Just 8% have spent "More than Planned" - a 4-pt drop from previously.
Moreover, in the aftermath of the U.S. presidential election, respondents do not see any immediate improvement occurring in their company's IT spending. In fact, nearly half (48%) now believe IT spending won't pick up for their company until the 3rd Quarter of 2009 or later - a two-fold increase since our August survey.
Corporate Smart Phones
The survey also looked at the corporate smart phone market, and found it is actually showing growth, with 35% of respondents reporting their company plans to buy smart phones next quarter, up 1-point from August.
Research In Motion (78%; down 1-pt) continues to garner the dominant share of planned corporate smart phone buying, but the Apple iPhone (22%; up 5-pts) shows considerable momentum going forward.
They noted that RIM's corporate share is heavily concentrated among larger companies (over 1,000 employees), while three quarters of Apple's share is among small-to-medium sized companies (under 1,000 employees).
Further confirming that the 3G iPhone is having a positive impact on the corporate market, nearly one-in-five respondents (18%) say the release of the 3G has made their company More Likely to purchase Apple products in the future.
U.S. corporate IT spending is in the midst of a huge nose-dive, the likes of which hasn't been seen before in a ChangeWave survey dating back to 2001.
"The current survey findings virtually guarantee that the technology sector will get hammered with pre-announcements on earnings misses before the January reporting season gets underway," said Smith.$page_length='long'; ?>