China's IT market is heating up. Look for IT outsourcing there to become a "market hotspot" in 2006, says Analysys International, an internet-based business information service provider. According to Analysys, which recently issued five forecasts for 2006, big domestic players in China will merge with small contractors as they jump into the market for offshore outsourcing. Europe and the U.S. will be major targets. Software outsourcing firms with more than 4,000 employees will begin to appear, although it will take some time for the concept of management application outsourcing to gain traction among small and medium-sized companies.

There will be more than 30 cell phone viruses in 2006, Analysys continues, making handset security a big opportunity in the security market. Analysys also predicts that product standardization among Chinese software providers will be slow, that medical logistics via e-commerce will account for a growing share of the logistics information market in China, and that chipmaker Intel will gradually exit the low-end desktop PC processor market. Due to declining profits from that sector and fierce competition from AMD, Intel will quit that market and focus on server processors, mobile computing, high-end PC processors, and consumer electronics, Analysys said. (Note, however, that the firm's prediction came at the very moment that Apple Computer chairman Steve Jobs was announcing an iMac powered by Intel processors.)