It may be decades before China or India delivers the full potential that many technology companies are impatient to realise, according to a new report from Deloitte's Technology, Media and Telecommunications (TMT) practice.
"Market opportunities in China and India have long been a subject of discussion, with the expectation that in coming years they will dwarf all other markets," said Chris Robertson, partner in charge of Technology, Media & Telecommunications at Deloitte in Birmingham.
"TMT companies are under tremendous pressure to capitalise on these two emerging giants. However, this potential is matched by significant challenges."
Both China and India have enormous populations and growing middle classes with disposable incomes that are steadily rising. These emerging segments represent potential markets for products and services that could be extremely lucrative and should not be ignored.
However, continued growth in both countries will likely be restrained by shortages of resources - from steel to water - and by rising prices for everything from building materials to labour.
In addition, India's billion-plus population is fragmented across hundreds of thousands of villages and hundreds of languages and its infrastructure remains undeveloped.
"Despite these challenges, China and India both have potential which cannot be ignored," Mr Robertson added. "Demand for TMT products and services are expected to grow strongly over the next few years.
"As an example, estimations have suggested that by 2010 between them these countries will purchase more than 250 million PCs.
"India is the preeminent supplier of offshore services.
"China is the dominant force in technology manufacturing for the mass market, and its mobile phone market - at over 360million subscribers - is already larger than the population of most nations.
"The TMT sectors in China and India will certainly blossom as markets - but that growth will be steady rather than meteoric.
"To successfully capitalise on this vast potential, companies will need to make significant long-term investments in building local knowledge and understanding," he said.
"They will need to maintain a long-term outlook based on measured expectations. Many of the foreign enterprises enjoying success in China and India today have been doing business there for decades, and their current returns are the direct result of a significant long-term investment in local knowledge and understanding."
Deloitte's key recommendations for TMT sector companies looking to capitalise on opportunities in India and China include: n Treat China and India as key suppliers in the short term and key markets in the long term.
Sourcing from China and India is fast becoming a competitive necessity - and for some TMT companies has been an imperative for many years.
In the short term, it allows TMT companies to reduce costs and improve margins. In the long-term, it can also provide first-hand experience doing business in these two increasingly important markets - knowledge and under-standing that will help them capitalise on the opportunities that emerge as ownership restrictions are relaxed and disposable income rises.
* Avoid the fallacy of "one size fits all". TMT companies must recognise that China and India are diverse, heterogeneous markets.
They are different on a number of key dimensions, including language, culture, literacy, consumer behaviour and buying preferences.
* Prepare for the emerging middle classes. India has a growing middle class whose disposable income is rising steadily. So does China, although this is currently smaller. These emerging segments represent a lucrative market for products and services.