Washington (Sept. 16, 2004) -- Corporate information technology spending is still growing, but the rate of growth will slow in the fourth quarter, led by a decline in laptop and desktop spending, according to a study released this week.

Only 31 percent of 628 business and technology professionals surveyed said that their company will increase fourth Quarter IT spending -- the lowest percentage recorded since June 2003 and down three points from the previous quarter, according to ChangeWave Research. Seventeen percent of those surveyed said that their spending either will decrease or there will be no spending at all.

After five successive quarters of increased spending, the drop marks the third consecutive quarter in which there has been a downturn in the rate of IT spending growth, noted ChangeWave founder Tobin Smith.

The largest drop-offs in Q4 spending will occur in laptops, desktops, database management software, application server software and PDAs. This is the third survey in a row in which desktops registered a decline and the second survey in a row for laptops -- "a clear signal that the corporate PC upgrade cycle peaked back in the first quarter and has since been in decline," ChangeWave noted. Voice over Internet Protocol and customer resource management software registered the largest fourth quarter spending improvements.

When asked if their corporate IT spending is on track thus far in the third quarter, 18 percent said that they have spent more than planned, down 1 percent from the previous survey, while 26 percent said that they have spent less than planned, up 4 percent.

Looking ahead to the first half of 2005, 30 percent of respondents thought that their company's overall IT budget will be greater than second half 2004, down six points from the previous survey. Only 15 percent thought it would be less than the second half of 2004, up four points.

-- WebCPA staff

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