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Corporate Spend for BlackBerry, iPhone Expected to Continue Gains

May 28, 2008


National Post.com
By David Pett

Is IT spending on the way down? It might be, according to a survey published in conjunction by RBC Capital Markets and research firm ChangeWave Research.

Polling more than 15,000 corporate IT buyers, the report found that while 27% of respondents said they've spent less in IT than they've planned for, 28% have said their IT budget for the next quarter is projected to be less than the prior one. The outlook in the third quarter of this year also appears to be stabilizing as well.

"While the absolute level of spending is what matters (and not factored into this analysis), from an investor's point of view, we believe the data provides an indication that the level of Q2/08 earnings misses related to corporate spending should hold level from Q1/08," the report said.

However, there are some bright spots. Spending in communications, networking, security and storage areas appear to be on the rise.

"From an individual stock perspective, we believe the data is most relevant for those companies with high corporate/enterprise mix such as Cisco, Juniper, and Foundry. Cisco for its part may be cementing its market commanding position during these unsettling times."

The report also found spending contraction in the PC market, servers, and software in both the application and platform sides.

In the smartphone market, Research In Motion Ltd.'s BlackBerry continues to dominate with 76% of corporate IT respondents polled say they're spending on the device in the next quarter and should gain another 5 percentage points down the road. Apple Inc.'s iPhone appears to be making further inroads against other vendors, and is expected to gain another 2 percentage points to 13% of the corporate market.

National Post.com