Turkey Information Technology Report Q3 20007

Market Overview

The Turkish IT market is set to be one of the fastest growing in the region over the next few years due to a large and predominantly young population and development of the Anatolian region. The young population provides a strong resource for PC sales in a market where penetration is still below the global average and the size of the Turkish IT market is expected by BMI to increase from US$4.7bn in 2006 to around US$7.2bn in 2011. With Turkey making solid progress on many ICT indicators and emerging as an increasingly important IT outsourcing location, the country's IT market is expected to continue its rise over the next few years. Moreover, an increasing number of global IT companies are establishing IT facilities in the country to serve both European and Middle Eastern markets. Their presence is attracting major players from other industries who in turn provide additional demand for IT products and services.

Despite the continuing uncertainty surrounding its EU destiny, Turkey's cultural and geographical position as a hub between Europe and the Middle East region has only served to accentuate for IT vendors the significance already deriving from its large market size. Acer has recently singled Turkey out as 'the country to focus on', while in 2006 Turkey ranked as one of Microsoft's top five growth markets. In the last 18-24 months, PC sales have been receiving a new momentum as the focus of demand shifts towards the Anatolian region, and this is expected to continue as the number of PCs per thousand population rises.

Short-term economic conditions also look favourable going into the second half of 2007, with the prospect of a more stable lira likely to open the way for interest rate cuts. The IT sector enjoyed strong growth in 2006, and healthy economic prospects should mean that growth over the forecast period is likely to exceed that of the early part of the decade. IT is now playing an increasingly significant role in a wider range of industries, as well as in daily life. The government has set itself a target of creating a US$9bn IT industry, and wants to increase computer ownership to 51% and internet usage to 48%. To this end it has recently established a Universal Service Fund specifically to spread the adoption of IT across Turkey.