Outside of Japan, information technology spending in the region amounted to 71.7 billion US dollars in 2002, up 2.6 percent from the previous year, International Data Corp. (IDC) said.

For this year, the IT research house is projecting spending will rise 7.7 percent to 77.2 billion dollars.

However IDC said: "IT market growth could be even lower once the full economic impact of the SARS virus outbreak is taken into account in affected countries in the region."

"On one hand, businesses are relieved with the reduction in uncertainty over Iraq but on the other hand the SARS outbreak in the region has eroded hopes of rapid economic revival," said Piyush Singh, IDC regional managing director.

"The IT market outlook for the region remains mired in uncertainty," Singh said.

Hardware spending topped the IT spending list in 2002 at 43.9 billion dollars, followed by IT services at 19.3 billion dollars and packaged software at 8.5 billion dollars.

In a report released earlier in the week, IDC said the Severe Acute Respiratory Syndrome viral (SARS) outbreak threatened to dampen regional computer sales in the second quarter.

It noted Singapore and Hong Kong, the two economies most badly affected by the outbreak, are already feeling the pinch as consumers stay at home to avoid exposure to the virus.

SPACE.WIRE