EITO members and sponsors

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


Mobile subscriptions by country in thousands,2002-2006

Source: EITO Task Force

1 Includes also Turkey2 Geographical demarcation

Mobile workers


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.


The digital world value chain


Three convergence scenarios


Drivers and inhibitors of convergence


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


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


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


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


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


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.


EITO members and sponsors

Documents

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