IBM foresees $150 bn business in BRIC nations by 2010

New Delhi, Jan 21 | Updated: Jan 22 2007, 06:20am hrs
Recognising India and the other three BRIC countries Brazil, Russia and China among the fastest growing IT markets globally, US-based technology giant IBM anticipates over two times the worldwide growth rate from its operations in these regions in the next four years.

IBM, which recorded total revenue of $91.4 billion in 2006, projects $150 billion opportunities by 2010 in BRIC countries alone. Collectively, Brazil, Russia, India and China contributed $4.5 billion in 2006, representing nearly 5% of its annual revenue.

The emerging markets of India, China, Brazil and Russia are among the fastest growing IT markets in the world and grew at 16% in 2006, IBMs chief financial officer Mark Loughridge said at an analyst conference to discuss the companys fourth quarter results.

While the companys India and Russia businesses registered a 30%-plus growth in the quarter ended December 2006, China and Brazil registered 18% and 9% growth, respectively.

The CFO said IBM was continuing to invest to strengthen its leadership position in the emerging markets.

IBM has expanded capabilities to its centres in India, Brazil and Argentina, while adding 20,000 employees in the low cost countries, he said.

IBMs India headcount is estimated to be at 50,000 in 2006. We continue to invest to build capabilities in these countries (BRIC markets) to address the fast-growing domestic market opportunities and to enhance IBMs globally integrated operations, Loughridge told the analysts.

The four markets collectively witnessed an annual growth rate of 18% in the quarter. With a growth rate of more than two times the worldwide rate, the BRIC markets have an opportunity to grow to $150 billion by 2010, Loughridge said. IBMs worldwide Q4 revenue rose 7% to 26.3 billion dollars, while its income from operations rose 8% to $3.5 billion in the period ended December 2006.

Asia Pacific, which delivered revenue growth of 5% in the quarter, remained strong led by India and China, he said.

IBM had a terrific quarter and a good year with record cash performance, profit and EPS as well as record payouts to shareholders. We are well-positioned in the growth areas of a changing IT industry, focussed on our evolving business model and poised for long term success for our clients and shareholders, IBM chairman, president and CEO Samuel J Palmisano said in a statement.