China's SMBs to Spend US$46B on IT by 2010.

Top 6 cities - Beijing, Shanghai, Guangzhou, Hangzhou, Chengdu and Wuhan - will account for almost half of the spending, says AMI study

SINGAPORE -- Small and medium businesses (SMBs, or companies with up to 999 employees) in China are slated to spend a whopping US$46 billion on boosting their IT infrastructure (excluding telecoms) by 2010. This is up from US$21 billion in 2005, giving China-based SMBs a compound annual growth rate of 14% between 2005 and 2010.

These findings emerged from a recent study by New York-based Access Markets International (AMI) Partners, Inc. "Since its entry into the World Trade Organization (WTO) in 2001, China has grown to become a global economic powerhouse," says Diana Ng, Singapore-based senior analyst at AMI-Partners. "Riding on the current momentum, and with the Olympics in Beijing in 2008 and the Shanghai World Expo in 2010, the business and economic growth potential in China remains very bullish."

It is not just prime cities like Beijing and Shanghai that will witness spurts in SMB investments in technology. Even second-tier cities like Guangzhou, Hangzhou, Chengdu and Wuhan will ride the growth wave in areas such as formation of new businesses and expansion of current businesses. Consequently, IT investments by these businesses will intensify.

"In addition to investments on computing, SMBs in these six cities will leverage the Internet to expand their business regionally and globally," Ms. Ng says. "This translates to a forecasted spend of US$2.9 billion by SMBs in the six cities alone in areas such as high-speed Internet access deployment and channeling resources to develop corporate websites and e-commerce facilities. As a result, IT-related services spend in these six cities alone will cross US$2.9billion, up 76% over 2006 spending levels."

Infocomm vendors should therefore look outside of Beijing and Shanghai to tap into the second- and third-tier cities across the huge mainland. "As Beijing and Shanghai become saturated, it is only natural and essential to plan for entry into other nascent cities," Ms. Ng says. "The sooner infocomm vendors realize this and act, the better their prospects will be going forward."

About the Study

AMI's study, titled The Global Forecast Model, provides a detailed picture of IT adoption and spending patterns in the SMB space across 66 different IT technology sub-categories and 14 Asia/Pacific countries, with roll-ups to regional views. The number of businesses and their spending on various technologies -- including wireless LANs, IP PBXs, VoIP, IT services, storage, IT security, VPNs/firewalls, intrusion detection, CRM, ERP/SCM -- are examined in depth across the 2005 to 2010 timeframe. The study also provides drill-down views of each of these technologies by eight employee-size and 19 vertical-market segments, and serves as the industry's most comprehensive worldwide SMB market planning tool.

For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.