2. EITO members and sponsors
EITO members EITO sponsors

3. Bruno Lamborghini Chairman of EITO
Presented by
Bruno Lamborghini Chairman of EITO

4. Strengthening signs of growth in the worldwide ICT market,
EITO 2004
Out of the tunnel!
Strengthening signs of growth in the worldwide ICT market,
however, recovery is still too slow and uncertain in many European countries

5. Main drivers reinforcing growth in 2004-2005
Broadband diffusion, both wired and wireless
Integrated networks for E-business and E-government
Increased digital convergence in consumer markets
New digital content and services

6. ICT as main driver for productivity gains in the US, but not yet in most European countries
Pick-up in MFP growth and increase in ICT investment
Correlation coefficient = 0.66; T-statistic = 3.03
Source: OECD , ICT and economic growth, 2003

7. How to take full benefit from ICT investment
OECD analysis certifies Europe‘s need to:
Remove unfavourable market conditions and
Promote „related factors“ such as
Education and training for high quality skills
Reorganisation of labour market and public administration
Effective competitive environment
E-business diffusion among SMEs

8. Europe must not lose momentum at the beginning of a new ICT development cycle
Potential to become a prosperous knowledge society of 500 million people
Should not miss new ICT cycle driven by North America and East Asia
EU enlargement brings new expectations and challenges, both for new and old member states

9. Relaunching Lisbon Need to relaunch the Lisbon programme through:
Achievements, but also delays regarding the target set in Lisbon for 2010
Need to relaunch the Lisbon programme through:
Focusing more on targets/parameters and defining implementation processes
Monitoring and benchmarking progress
Defining and verifying accountability

10. Enhanced policy actions should be focused on
Human resources as main strategic asset
Main infrastructures: Broadband and DTV
Main professional applications: E-business, Ecosystems and E-government
Main consumer applications: digital content and services

11. Western European ICT market growth 1995-2005, in %
Source: EITO in cooperation with IDC
Market value 2004: 611 billion Euro

12. Western European ICT market growth by segment 2003-2005, in %
Source: EITO in cooperation with IDC
Market value 2004: 611 billion Euro

13. Western European IT market growth by country 2004-2005, in %
Source: EITO in cooperation with IDC
Market value 2004: 294 billion Euro

14. Western European telecom market growth by country 2004-2005, in %
Source: EITO in cooperation with IDC
Market value 2004: 317 billion Euro

15. EU enlargement* – IT and TLC markets in 2003
Country
IT spending in € million
IT/GDP in %
CAGR 2005/2003 in %
TLC spending in € million
TLC/GDP in %
Czech Republic
2,620
3.3
8.7
3,930
5.0
2.8
Estonia
216
3.1
6.5
524
7.5
Hungary
1,956
3.5
10.0
4,001
7.2
4.2
Latvia
220
2.5
9.4
670
7.6
5.6
Lithuania
257
1.7
12.5
787
7.8
Poland
3,992
2.0
12.0
10,816
5.4
7.7
Slovakia
757
2.4
9.2
1,255
4.0
2.1
Slovenia
507
8.8
978
Total
10,525
3.0
11.0
22,961
5.8
* Excludes Cyprus and Malta
Source: EITO in cooperation with IDC

16. Web users and web buyers by country, 2003-2007
Web users by country in million
Web users as % of population
Source: EITO in cooperation with IDC

17. Mobile subscriptions by country in thousands, 2002-2006
1 Includes also Turkey
2 Geographical demarcation
Source: EITO Task Force

18. Mobile workers
Source: EITO in cooperation with IDC

19. Mobile applications, being available anywhere and anytime
Mobile
Mobile sales force automation
Mobile supply chain automation
Mobile directories
Mobile cooperative
Mobile customer support
Mobile payment and M-commerce

20. ADSL lines by country in thousands, 2002-2006
1 Includes also Turkey
2 Geographical demarcation
Source: EITO Task Force

21. Consumer Electronics (CE) market in Western Europe in million units, 2003-2004
Product
2003
2004
2004/03 in %
Cathode ray tube TV (CRT TV)
24.4
23.6
-3.0
Advanced TV (flat screen)
1.4
3.0
112.8
Digital video discs (DVD)
24.1
26.3
8.8
Video cassette recorders (VCR)
8.4
6.3
-25.3
Camcorders (CCR)
3.5
3.6
0,1
Digital still camera (DSC)
15.5
21.7
40.1
Set-top boxes and kits
5.8
6.0
3.8
Digital personal audio
13.8
16.1
16.2
MP3-format-based digital personal audio sets
1.1
2.3
111.1
Home cinema systems
4.8
35.4
Audio home systems and separate Hifi elements
14.5
-6.4
Game consoles
12.7
13.1
3.9
Total value in € billion
44.5
46.3
4.2
Of which: Digital products
52%
58%
17%
Source: EITO 2004 special study

22. E-business as key area for European enterprises
Continuous web-enablement of enterprise applications
Implementation and integration of process-oriented applications (SCM, PLM)
Adoption of technologies based on Internet protocol
Demand for business intelligence tools/solutions
Adoption of Web services standards for connectivity
Challenges:
Budget-related constraints
Focus on ROI and cost saving
Search for real value leveraging on existing investment
Pragmatic step-by-step implementation

23. Limited IT services growth due to:
Demand for cost control
Focus on core competences
Outsourcing operations (shift to offshore services)
System integration focused on solid ROI and tangible business value

24. Opportunities and challenges for European SMEs
IT spending by company size in 2003:
1-99 employees 28%
employees 26%
500 employees and more 46%
SMEs approach to ICT ( employees):
Laggards 36%
Wait and see 29%
Fast followers 17%
IT-oriented 18%
Source: EITO in cooperation with IDC

25. EITO 2004 special study: Convergence and the digital world
Current and future technological convergence accelerates the adoption of new applications, devices and infrastructures.
Convergence drives the realisation of a digital world and challenges present and new business players.
New digital value chains are changing traditional business models and processes.
Most effective convergence relates to digital content, services and business processes, mostly aimed at the end user.
Source: EITO 2004 special study

26. Convergence and the digital world - definition
The phenomenon by which the evolution and/or the integration of technologies with different origins allows infrastructure, delivery devices and applications to provide existing or new functionality.
Convergence enables providers to satisfy existing demands more efficiently or conveniently or supply entirely new products and services.
Source: EITO 2004 special study

27. The digital world value chain
Source: EITO 2004 special study

28. Three convergence scenarios
Source: EITO 2004 special study

29. Drivers and inhibitors of convergence
Source: EITO 2004 special study

30. Convergence in infrastructure
Limited convergence due to different standards and networks
Convergence around seamless digital networks (Internet protocol) with implications for standards definitions and cross-network communication
New investment driven by VoIP and mobile Internet applications
Source: EITO 2004 special study

31. Convergence in delivery devices
Limited convergence due to depressed market places and constraints for components (battery life, unit size and cost of new chipsets)
End-user reluctance to accept converged devices
Limited common functionalities
Failure of some products
Source: EITO 2004 special study

32. Convergence in communications
Convergence takes place in communications applications, which were historically separated, and will accelerate as soon as IP becomes a dominant network carrier
Present converging killer applications: SMS/MMS and
Source: EITO 2004 special study

33. Convergence in information and entertainment
High degree of convergence due to
ability to use digital distribution
availability of fast infrastructure connected to an increasing number of delivery devices
Highly successful second generation online music delivery (which will be followed by online video delivery)
Other successful areas: news, Internet browsing and online gaming
Main obstacles: content piracy (music) and end- user reluctance to pay for virtual entertainment
Source: EITO 2004 special study

34. Convergence in transactions
Strong area of potential convergence, driven mainly by the business sector while consumers will follow
Few integration constraints and open standards
Benefits
Reduced costs
Improved services
Efficiency
Corporate responsiveness
Source: EITO 2004 special study

35. Conclusions
New communication technologies, media and devices as well as the Internet are meeting latent consumer and business needs for seamless, simple and useful digital tools.
An increased number of interested commercial parties, combined with cultural, economic and social changes, will drive the emergence of a true digital world over the next five years.
Plenty of opportunities for digital content and services providers and for digital network operators in Europe.
Need to clarify intellectual property rights‘ rules favouring market development.
Need to promote investment and entrepreneurship exploiting the digital world value chain and opening new market opportunities.
Source: EITO 2004 special study