China to Power Asian Internet Use Past U.S. - Compelling Numbers from IDC

SINGAPORE - The number of Asia/Pacific (excluding Japan) internet users will surpass that of the United States by the year 2005, according to the International Data Corporation (IDC).

From a base of 64 million in 2000, Asia/Pacific Web users (ex-Japan) are forecast to exceed 240 million in 2005, representing a compounded annual growth rate in excess of 30 percent. By 2005, China, Korea and India will account for more than 72 percent of total users, with Greater China (China, Hong Kong and Taiwan) eventually comprising nearly half of all users.

IDC sees an increase from 39 percent in 2000 to 50 percent in 2005 of Asia Pacific (ex-Japan) users coming from Chinese speaking countries. This number is even higher if the Chinese-speaking segments of other Asia-Pacific countries are included.

"China itself is still an extremely poor country, but these trends herald a fundamental shift in the regional balance of power, especially considering the economic and cultural clout behind greater China," notes Douglas A Jaffe, a Singapore-based Internet analyst with IDC. "Even so, the Internet is pushing populations together faster than governments."

According to IDC's biannual "ICMM Report", Internet penetration in the US by 2005 will hover around 76 percent, while in Asia, the corresponding figure will rest below 9 percent. Rapid growth, coupled with a huge pool of potential users, will work to ensure Asia's place at the forefront of the Internet revolution, according to IDC.

And for firms contemplating investing in this dynamic region, the web will serve as a low cost channel to reach millions of potential consumers and also businesses. Internet users and e-commerce revenues are increasing rapidly and the wireless Internet is poised to transform Asia into a key global growth center for mobile commerce.

The prediction utilizes data generated by IDC's Internet Commerce Market Modela (ICMM) which shows a web economy powering into the 21st Century.

According to the data, the PC will remain the key Web access device. IDC expects solid PC sales growth in 2001, reflecting the continued strength of markets like India and China.

PCs are dominant, but smart handheld devices (SHDs) are taking off in the Asia/Pacific, with personal companions leading this device class. In the Internet appliance category, IDC sees Internet SHDs, iTV, and Internet gaming devices as the most popular form factors.

The Asia/Pacific region (ex-Japan) now accounts for more than 25 percent of the world's total installed base of mobile phones. Mobile subscribers will exceed 366 million in 2004, leading to a penetration rate that will far exceed that of the personal computer.

At present, only 2.6 percent of mobile phones are used for wireless Internet use, but IDC expects this proportion to increase to nearly 40 percent by 2005.

IDC expects Asia to become a vibrant center for the development of the wireless economy, with mCommerce revenues forecast to exceed US$36 billion by 2004. E-commerce is expected to serve as an important engine of growth for development across the region, with revenues to hit nearly $600 billion in 2005.

Both B2B and B2C eCommerce are expected to exhibit solid growth, with the former forecasted to hit $516 billion in 2005, and the latter about $83 billion.

Data: Asia Pulse, atimes.com