Overall IT forecast growth in U.S. dollar terms has been revised up from 5.1% to 5.6% for 2011 and from 4.4% to 4.5% for 2012.

The forecast outlook is stable, despite political unrest in the Middle East; we have yet to fully factor in the potential impacts of the recent natural disasters in Japan.

We have added media tablets to our computing hardware spending estimates beginning this quarter, which adds $10 billion to the forecast in 2010 and close to $80 billion by 2015.

Gartner's forecast for dollar-valued global IT spending growth has been revised up to 5.6% from 5.1% for 2011 and to 4.5% from 4.4% for 2012. The addition of media tablets, reinforced by an expected additional decline in the value of the dollar, accounts for the increase in top-line growth. Absent the addition of media tablets, the forecast would have slightly declined in constant-dollar terms; however, with their addition, there's virtually no change in underlying forecast growth at the level of overall IT. This stable forecast outlook comes despite political unrest in the Middle East, while the impact on IT markets of the recent natural disasters in Japan is yet to be fully understood.

This quarter, we have added media tablets to our computing hardware spending forecast, adding an additional $10 billion in 2010 that eventually increases to $80 billion by 2015. This more than offsets the reduction in the PC forecast, which reflected our assumptions about the impact of media tablets on PC spending.

Through 2015, we continue to forecast long-term annual average growth in dollar-valued global IT spending of 4.8%.

Global IT Spending by Technology Sector

A summary of the forecast data is shown in Table 1.

Source: Gartner (March 2011)

Stable Forecast Outlook Despite Political Unrest in the Middle East and the Recent Natural Disasters in Japan

Middle East

The Middle East share of global IT spending is about 2%. While the political unrest affecting many countries in the region may well dent IT spending levels, any impact would be insignificant at the global level. However, continued increases in oil prices as a result of uncertainty about supply may hinder global economic growth, which has the potential to constrain global IT spending.

Japan

We had largely completed our forecast by the time the recent natural disasters in Japan occurred, and we are still evaluating their likely impact on our forecast. On this point, we are looking at two potential effects on IT markets as a result of the earthquake and tsunami in Japan: consequences of disruptions in the global electronics supply chain and impacts on IT demand.

Electronics Supply Chain

Immediate damage to Japanese manufacturing plants could cause a break in the continuity of supply of critical raw materials and components, such as silicon wafers for integrated circuit manufacture, bismaleimide triazine resin for semiconductor packaging, and batteries for electronics production. Furthermore, ongoing disruption to production and logistics could be caused by the problems at Japan's damaged nuclear facilities and electric grid, and any energy shortages that result because of these damages.

Our assessment at this stage — two weeks after the earthquake first hit — is that the initial concerns about shortages of critical electronics components may have been an overreaction. We are cautiously optimistic that, although supply chains will be stretched thin, the combination of sufficient inventories, the availability of alternative suppliers, competitive market forces and the recovery of Japanese facilities will allow the industry to operate without major disruption. There may well be spot shortages — challenging supply chain managers to carefully manage inventory, orders, alternative suppliers and alternative transportation and to hedge supplies using strategic purchases — but overall we do not see critical shortages causing widespread disruption to the supply of electronics finished goods.

IT Demand

The priority for Japan is to deal with the humanitarian disaster and then begin the task of rebuilding its infrastructure. We foresee a pause in IT spending in Japan in the short term — perhaps for the next six months — before a boost beginning later in 2011. All told, however, Japan accounted for just under 9% of global IT spending in 2010, so while we may see reduced IT spending growth in Japan for 2011 overall, the effect on global IT spending is likely to be minimal. At that, any adverse effect is almost certain to diminish and even turn positive later in the forecast as Japan reconstructs.

As events in Japan and the Middle East continue to unfold, we will review and update our assumptions for the 2Q11 forecast update in June.

Media Tablets

We have added media tablets to our computing hardware spending estimates. This amounts to $10 billion in 2010, rising to close to $80 billion by 2015, as shown in Table 2.

Source: Gartner (March 2011)

Highlights:

• Global spending on media tablets is forecast to increase at an annual average rate of 52% through 2015.
• This boost has more than offset a reduction in the PC forecast, which factored in substitution by media tablets.
• Including media tablets has increased our computing hardware growth forecast from 7.5% to 9.5% for 2011.
• By 2014, annual spending on media tablets will be greater than that for the separate storage, print and server segments.