computer and telecom industry report 2022

Computer & Telecom Sector 2022 Outlook

Computer and Telecom Sector Outlook report 2022

Normalising consumer demand amid supply chain disruption

The computer industry experienced an unexpected comeback in 2020 and 2021 with global shipments reaching levels not seen since 2014. The pandemic forced educational institutions, public administration and corporates to fast-forward their adoption of remote work and invest tens of billions of dollars into new hardware, with annual computer shipments jumping from a low of 412 million units in 2019 to a high of 516 million units in 2021, amounting to a total turnover of US$360bn. 

Since Q3 2021, global computer shipments have been declining on a year-on-year basis. While the industry attributed much of the decline to supply chain issues in H2 2021, signs of softer demand began to materialise in Q1 2022 where leading manufacturers had mixed fortunes and total shipments is expected to decline by 5-10% to around 465-490 million units for the full year. Where does the sector go from here? Download our report today to find out key sector risks and opportunities across the Asia Pacific region.

key findings in computer and telecom industry outlook 2022

 

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5G to finally take off in 2022

L

LOW RISK for entreprises

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

Updated in December 2021.
  • Highly regulated, concentrated markets with generally predictable cash-flows and limited churn
  • Generally high EBITDA margins (30-40%)
  • Long-term trend of booming data use
  • Resilience to periods of downturns in advanced economies
  • High value added, high margins in IT consulting, software, cloud computing
  • Significant share of recurring revenues
  • Broad customer base (industries, retail, banking, insurance, transport, etc.)
  • Powerful long term growth drivers (digitization of the economy)
  • Positive legacy of the Covid-19 outbreak on future IT investment
  • Market maturity in advanced economies leads to strong price competition
  • Highly capital intensive business (capex in the range of 10-20% of revenue)
  • High leverage (net debt / EBITDA > 3) among a few large U.S. and European players
  • Uncertainties related to the U.S.-China tensions, Huawei of China being the leader in 5G technologies
  • Sensitivity to periods of downturns in emerging economies
  • Low barriers to entry for IT Services
  • Sensitivity to cuts in corporate IT investment

Key players

Country Role Sector risk
United States

#1 Market by revenue

B

Medium risk

China

#2 Market by revenue

B

Medium risk

Japan

#3 Market by revenue

B

Medium risk

United Kingdom

#4 Market by revenue

B

Medium risk

Germany

#5 Market by revenue

A

Low risk

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