PRLog (Press Release) -
Apr 11, 2010 -
Despite an anticipated slowdown in 2009, the Israeli IT market should have enough momentum from key sectors to continue to expand over BMI's 2008-2013 forecast period. BMI estimates that the local IT market reached an estimated value of US$4.83bn in 2008. The market is forecast to grow at a CAGR of 6% over the forecast period, to reach a projected US$6.5bn in 2013. IT spending still grew in H108 with stronger-than-
expected demand from both enterprise and household sectors. However, following a deterioration in H208, BMI believes that growth will ease further in 2009 thanks to the economic slowdown. Rising unemployment, and job insecurity for those in work, will have a negative impact on consumer sentiment, while many companies facing tight credit conditions will likely cut back on IT budgets. The Israel IT market has a number of positive fundamentals, which should keep it in positive territory. Low computer penetration, of around 30%, offers potential for continued growth. High internet penetration and growing broadband penetration are drivers for the retail segment, along with interest in multimedia and mobile computing applications, and the new popularity of netbooks. Industry Developments Israel's high-tech merger activity fell in 2008, as a result of the downturn in the global economy. According to figures from Israel's Venture Capital Research Centre (JVC), the value of Israel high-tech mergers were down 19% year-on-year (y-o-y) to US$2.64bn. The average deal size was also down, to around US$31mn. The whole year passed without a single high-tech IPO, a first since 2003. IT is viewed as an important policy tool for the Israeli government's 2008-2010 socio-economic policy framework. The National Economic Council recently submitted a policy agenda to the government, which specified two main policy tracks of reducing poverty and achieving balanced growth. The first track is expected to emerge as the main priority. As part of its modernisation agenda, the government is pressing ahead with various other strands of its e-government project. Among other initiatives, there has also been spending on computers in healthcare and the nationwide paperless court initiative. The e-government programme is leading to increased demand for computers, with the Israeli government reaching a supply agreement in 2007 with Dell and HP.
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