IT sector growth forecast at just 10%, led by smartphones

China's information technology market is projected to increase a middling 10 percent this year with the smartphone and tablet sector leading the growth, research company IDC said on Tuesday.

The nation's slowing economy and mounting concerns over Sino-United States cybersecurity conflicts are likely to drive away some overseas tech companies and thus lower overall IT spending.

Assuming the economy remains stable, pent-up demand will drive IT spending growth back up to double digits before another likely slowdown occurs in 2015, analysts said.

The mobile devices segment is set to enjoy an annual growth rate of 20 percent in 2014, the fastest across the market, IDC said.

Kitty Fok, managing director of IDC China, said that local players will most definitely get a bigger say in the market in the second half of 2014 as they gain ground from overseas vendors.

"I would say it's a very natural shift from personal computers to smartphones because more devices are needed in the mobile era," said Fok.

The shorter life cycle of mobile devices compared with PCs also will keep shipments of smartphones and tablets high.

"In lower-tier cities, people have only one mobile device, and a large-screen smartphone is most likely their only choice," said Fok.

Local brands such as Xiaomi Corp, Lenovo Group Ltd and Huawei Technologies Co Ltd, have announced aggressive plans to grow their mobile device market share in China.

Xiaomi, a Beijing-based manufacturer, unveiled its first tablet product last week, hoping to challenge Apple Inc's dominance in the sector.

"It is worth it for Xiaomi to enter new areas because it remains a small company and has to find more profit before it becomes noticeable to the global giants," said Antonio Wang, research director at IDC.

The enterprise IT market, however, presents a totally different picture. Not only will PCs for enterprise use continue to slump, spending growth in software, storage and networks will all be below the industry average, according to IDC.

Economic and policy uncertainties in China will cause some overseas companies to shift their investment focus back to the US because demand is quickly recovering there, Fok said.

The escalating Internet security debate between the world's top two economies also will make US tech firms think twice before tapping into the Chinese market, she added.

The US slammed the Chinese government on Monday for stealing commercial information online.

China denied all the accusations, calling them false.

Overall IT spending in China is likely to pick up after 2015, with a stabilized government structure and a new five-year plan in place, according to Fok.

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