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Atradius gives forecast on UK ICT sector PDF Print E-mail
Wednesday, 08 July 2015

Leading trade credit insurer Atradius has given UK technology businesses a “fair” forecast in a sector report.

The Atradius Market Monitor report reveals highs and lows within the Information and Communications Technology (ICT) industry with the development of mobile apps and new technology seen as the main driver for 2015.

The report details that the UK ICT sector consists of more than 115,000 companies with revenues upwards of £140bn. The British computer software industry is a global player, accounting for 5% of the worldwide market while the British mobile phone market is the largest in Europe with an annual value of £14bn.

Atradius predicts that 2015 will continue to see a decline in PC sales while tablet and smartphone sales will continue to grow. However, both are getting closer to saturation and margins remain slim due to the dominance of key players Samsung and Apple. The industry will see significant growth from the wearable technology segment with a forecast increase of 158% in 2015. A surge in investment in data centres and cloud storage will also mean that this will continue to boost the sector.

However, the Atradius report warns that British ICT businesses will face stronger competition from their European peers, mainly due to the strengthening of the pound, putting pressure on sales prices and margins. While this will drive some businesses to turn to foreign ICT companies, data integrity and disaster recovery will mean that many business still have to store their data within the UK and therefore will rely on domestic businesses.

Meanwhile, due to the dominance of public sector contracts for IT companies, seasonal peaks remain a concern. High volumes of sales are driven by the public sector during two key points in the year – fiscal budget year end in April and the start of the school year in September. During these two periods, multi-million pound contracts can be won and lost, strongly shaping the annual results for the impacted distributors. As public sector budgets are expected to continue to be reduced, 2015 is expected to be another difficult year.

Jason Curtis head of Corporate Accounts at Atradius, said: “While many larger businesses can count on economies of scale, smaller players generally face more troubles – unless they are highly innovative or well-established in niche products. In ICT, product life-cycles remain short and smaller businesses’ sustainability is driven by innovation and the ability to develop new products and bring them quickly to market.”

(Source - Atradius Press Release)



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