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IT technical research company, IDC Japan, forecasted that the IT market in Japan for 2005 would exceed last year's. At the same time IDC Japan outlined what it believed were the latest teenage trends in regard to the Japanese IT market in 2005. The factors comprising the main trend for teenagers in the Japanese IT market for 2005 are as follows, * Investment in the IT industry in 2005 exceeds earlier expectations Investment in the IT industry for 2005 so far is up 2.3%, so exceeding earlier expectations (1.8%) suggested in September 2004. The main factor behind the increase seems to be the slow down in the decline of personal computer prices. Also, the server market is up a little in 2005 compared to 2004. * PC prices are recovering and stabilizing, The decline in the average price of a PC slowed down in the second half of 2004 while the high-priced server market was slightly greater than was earlier thought. These tendencies will continue through 2005, therefore, it is anticipated that growth in the IT industry will exceed earlier expectations. * Platform strengthened by IT venture business The demand of end users is shifting into purchasing total systems as whole solutions rather than purchasing individual products. Therefore, the IT business needs to focus on facilitating the interchange of data and information between databases and multiple servers for each application. * Multifunctional applications created by using IP exchangers including functions such as mobile phone transmissions, message searches, voice message reporting and automatic replying will be more developed in 2005. Making a mobile phone into an IP and developing a related application will accelerate after 2006. Nevertheless, interest in business applications will heighten in 2005. Also, the technology, symbolized by the integration of systems and communications, will likely come to a standstill in 2005, although applications will be introduced for the general public. * Opening up the storage management market The volume of IT shipments will keep on increasing in 2005, although selling-price levels will be held down due to the continuous depreciation of storage prices per gigabit. Also, demand for mass low-cost storage disk systems for the purpose of archiving and backing up the data will expand. * Interest in diversification of BPO and outsourcing IT outsourcing is being used as a solution by companies due to the reality that one of the most important things that a firm can to stay in the black is to cut down on the budget. Not only that, the use of IT outsourcing will accelerate after 2005 because firms are taking an active attitude toward the use of outside resources and know how to prepare for changes in market situations and strengthen their competitive levels. * Expansion of the game and contents markets It is anticipated that the game market will be vitalized by the sales of portable game boxes. Also, the use of music contents will accelerate by the diffusion of portable game boxes. Sales of full-sized flat-screen TVs will pick up following the full-scale launch of digital broadcasting. Nevertheless, these factors will do little to impact the course of IT investment in 2005. Source: IDC Japan report. Written by Shin Tae Chol, Kotra, Tokyo Office Posting date: Feb. 15, 2005