PLN 50bn IT market in Poland and record growth in hardware sales in 2020
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Despite negative assumptions, the value of the IT market in Poland in 2020 proved resilient to both the COVID-19 pandemic and the crisis caused by it. PMR estimates that last year IT spending in Poland grew by 6% to PLN 49.2bn. The reason for such growth was undoubtedly the shift to remote working and learning, which affected not only the demand for computer hardware and its record sales but also increased interest in the services and software segment, including cloud solutions.
IT market resilient to crisis COVID-19
The value of the IT market in Poland in 2020 amounted to PLN 49.2bn, which means an increase of 6% y/y. Despite initial predictions, the pandemic did not shake the market, and businesses and individual customers adapting to remote working and learning and accelerated digital transformation in the case of the B2B segment increased spending on IT. Ultimately, contrary to initial fears, the market was also unaffected by the fall in GDP and the somewhat reduced budgets of companies, households, and the education sector.
At the same time, in 2020, the IT market was influenced by negative factors – a lower GDP indicator, a lower rate of growth of the number of enterprises in Poland, a lower scale of foreign investment on the Polish market due to the uncertain situation and business risks. In 2020, many companies refrained from investment decisions, waiting for a more stable situation on the market.
Record equipment sales
The IT hardware segment with an increase of 23% year on year, excluding smartphone sales, proved to be the most significant for the market value. It is worth noting that the situation in Poland stands out against global trends, where declines are visible in the corresponding market. The record increase in sales of PCs and laptops was due to remote working and learning. Computer prices increased slightly year on year as customers focused on the lower price shelves, and the market value was built by strong sales volume. Computer accessories necessary for remote working, such as webcams, headphones with a microphone, or home networking devices, have also become eagerly purchased equipment. Printing devices and tablets were also part of the long-term upward trend, even though they had previously seen sharp declines. In addition, the coronavirus pandemic proved to be a catalyst for increased sales of monitors.
Sales peak in the smartphone market
The only major hardware category to record a sharp decline in both volume and value in 2020 is the smartphone segment. Last year, smartphone sales in Poland dropped for the first time in history, and PMR estimates the dynamics of the decline at around -10%. Reasons for this change may include limited mobile POS activity during the pandemic and a focus by Poles on computer hardware in their IT spending. Customers also decided to postpone major spending on smartphones or chose smartphones from cheaper brands such as Xiaomi.
Growth trends also in the IT services and software market
In 2020, the IT market in Poland also recorded value increases in the services and software markets. The pandemic caused companies to invest in other services and solutions despite optimisation of expenditures involving the freezing of larger contracts and suspension of new projects for the provision of IT services or supply of software. Outsourcing and integration services became particularly relevant, and in the software market, operating systems and office applications gained importance. Cyber security and cloud solutions also became significant during the pandemic. The value of the market was also influenced by household spending on games and educational programmes.
IT market forecasts for 2021-2026
Between 2021 and 2026, PMR forecasts further positive growth trends in the IT market in Poland, with a projected CAGR of 4.8% during this period. Over the six-year horizon, IT spending will grow in all segments of the market. However, due to the strong saturation of the hardware market in the years 2020-2021, the focus of IT investments will be shifted primarily to the software market in the B2B segment as well as to the services market. IT spending will be supported by the second wave of digital business transformation initiated by the COVID-19 crisis.
In its forecasting model, PMR takes into account the positive impact of EU funds on the IT spending market in Poland. Under the EU Reconstruction Fund for 2021-2027, digitisation is one of the funding priorities. Poland will receive a total of nearly EUR 23bn from the Reconstruction Fund for all priority areas, 20% of which will be earmarked for digital transformation. Converted into PLN, this is about PLN 20bn.