In Q1 2925 the Information Technology and Communications (ITC) market continued to grow significantly. In the quarter total sales were $1.877 billion, the highest ever for a first calendar quarter; while total net profit was $287 billion. Growth for each respectively was 4% and 8%. In the year to the end of March total sales were $7.615 trillion (up 4%) and total net profit – $1.285 trillion (up 24%). In this post I’ll outline the changes by offering, supplier and country. These data are highlights of ITCandor’s research process which we have complete each quarter since the beginning of 2009.
See my Figure above for a summary of total worldwide sales and net profit by quarter from the beginning of 2023.
In comparing the fate of selected ITC offerings (see my Figure above) I’ve chosen to include the sales of three ‘below the line’ offerings – Hard Disk Drive (HDDs), DRAM memory and NAND solid state storage devices. The sales of these from from supplier to supplier (rather than end-user) are excluded from my calculations of worldwide spending. In the quarter there were seven offerings whose sales grew at double digit rates:
- HDD sales reached $32 billion, growing 20% in the quarter and 39% in the year to the end of March. Significantly perhaps, the market leader Western Digital decided to spin off its SanDisk solid state business it acquired in 2016.
- Smart phone sales grew by 14% to $102 billion and by 11% to $406 billion in the year. It is probable that smart phone fourth quarter sales will exceed the $127 billion record set in 2021.
- DRAM sales also grew by 14% in the quarter and by 41% to $138 billion in the year – underling the stochastic nature of growth in this ‘below the line’ market.
- IaaS/PaaS cloud computing spending grew by 13% in the quarter and year (to $303 billion) – demonstrating a slight improvement in growth of these infrastructure components of cloud computing after the lows of 2023.
- SaaS spending grew by 11% in the quarter and by 8% in the year to $244 billion). Since the beginning of 2024 spending growth on this software element of cloud computing has been consistently below the infrastructure parts.
- Spending on servers grew by 10% in the quarter and by 25% in the year (to $127 billion) – showing that the boost in sales from the demand for GPU-based AI applications is starting to wane.
The areas that demonstrated lower spending growth included Infrastructure software (2% in the quarter) and storage systems (1%). The only sectors experiencing negative spending growth were NAND solid state storage (-10% in the quarter, despite a 36% growth in the year) and Gaming, where the 18% decline in quarterly spending and 23% drop in the year were due to the lack of new consoles; Nintendo’s introduction of the Switch 2 this month should slow the overall decline somewhat in Q2, even though it is a ‘mid life kicker’.
Quanta Computer (the Taiwanese contract manufacturer of laptops and other IT equipment) grew its revenues by 79% in the quarter and by 47% in the year – replacing nVIDIA at the top in my Figure above, which grew its revenues in the quarter by 69% and by 86% in the year. In fact the top 10 of the 11 revenue growth leaders in the quarter were ‘below the line’ suppliers. Sony in 11th place saw the highest quarterly growth rate (23%) of those who sell mainly to end-users. 
The vendors showing the worst revenue declines included four European companies (Telefonica, Sopra Steria, Telecom Italia and ST Micro). At the bottom of the table were Nintendo, which was on the verge of introducing its new console and Western Digital, which had just of loaded its SanDisk solid state disk business.
My Figure above shows the spending growth for those at the top (Egypt to Canada) and bottom (Hong Long to UAE) of the 43 I track each quarter. The big differences between local growth (the dotted lines) and current $US growth (the solid lines) are largely due to substantial exchange rate fluctuations from Q1 2024 to Q1 2025.
Overall it’s great to see the ITC market doing well again. The top technologies are AI-enabled servers, raw storage, GPUs and the three cloud computing elements; although each is maturing making forecasting a challenge. I have some worries for the future are about poor growth in European countries and by European suppliers, as well as the effect of international tariffs on the world’s most global industry. My most serious concern is about the effects of war in the Middle East, the Ukraine and elsewhere.