Fujitsu 2008 Annual Report Download - page 28

n Market Trends
China’s IT market is predicted to grow by 10% in 2008. Propelled by momentum from
the 2008 Beijing Olympics and the 2010 World Expo in Shanghai, China’s IT investment
is poised for a high average annual growth rate of roughly 11% from 2007 to 2011.
However, concerns abound that the business environment may worsen for foreign IT
firms. One is China’s new labor law, notable for its bolder protection of employees, which
came into force in January 2008. Other concerns include scrapping of the country’s
preferential tax system for foreign-owned firms, as well as the ongoing advancement of
China’s home-grown IT.
High market growth in APAC (excluding China) is expected to continue, with a pro-
jected growth rate of around 6% in 2008. In South Korea and Taiwan, although the
market weight of hardware will likely remain substantial, overall IT market growth will be
led by notable growth in services. In the ASEAN region, financial sector investment
plans will possibly come under review in the wake of the US subprime crisis. On the
other hand, active investment to upgrade IT infrastructure by the region’s automobile
and communications network sectors should continue. In Oceania, the IT market is
expanding mainly due to growth in outsourcing and managed services, including a
marked increase in data center demand. In India, robust IT market growth of around
11% is expected to continue from 2007 to 2011 due to increased foreign investment,
reflecting the concentration of global offshore development work in the country. At the
same time, this trend is triggering a commensurate increase in costs, leading to the
search for new business models.
n Initiatives Going Forward
In China, our initiatives will be spearheaded by efforts to further expand and upgrade
one of Fujitsu’s dominant business strengths—Technology Solutions. Going forward,
we plan to reinforce our services business in the Chinese market, with particular empha-
sis on expanding IT operations services, outsourcing and offshore development opera-
tions. Here, we will look beyond service provision to Japanese firms, with whom we
have extensive business experience, to cement ties with China’s prominent system inte-
grators and other companies to provide local customers in China with high-quality
services. In the System Products sector, which includes servers and storage, we remain
committed to supporting efforts by Chinese customers to fortify their IT infrastructure
through the provision of cutting-edge technologies and services.
In South Korea and Taiwan, we will step up proposals for managed services, as
well as propose solutions for optimizing IT infrastructure. In the ASEAN region, in addi-
tion to supplying servers and other products, our focus will be on IT infrastructure
services, data centers, operations support and other outsourcing business. In Oceania,
we plan to leverage our well-developed service menu to offer high-quality IT services
specifically for the government and financial sectors. Data centers will also be
expanded in parallel with growth in outsourcing demand. In India, we hope to use
partnerships to promote servers and other system product businesses. Similarly, we
intend to expand our offshore business in India to promote growth in business target-
ing Europe, the US and Japan.
APAC, China
(Years ended March 31)
NET SALES* AND OPERATING
INCOME MARGIN
(Billions of Yen) (%)
Net sales (left scale)
Operating income margin (right scale)
* Including intersegment sales
2004 2005 2006 2007 2008
0
200
400
600
1,000
800
0
3
2
1
4
5
579.1 602.8
718.8
807.1 855.0
2.3 2.0 2.1
1.4 1.7
026
ANNUAL REPORT 2008FUJITSU LIMITED
FEATURE 2: ACCELERATING GLOBAL EXPANSION