Market Report, "Bahrain Information Technology Report 2011", published

Jan. 30, 2011 - PRLog -- The total size of the Bahrain IT market in 2010 is estimated by BMI at nearly US$314mn, up from US$280mn in 2009. BMI expects a market compound annual growth rate (CAGR) of 7% for 2010-2015. The IT market was expected to pick up in 2010 following a weaker 2009, when lower oil prices, economic uncertainty and tighter credit conditions led to an IT market slowdown.

There should still be significant opportunities going forward. Bahrain is becoming an important regional financial hub and there should be substantial spending in this sector. Economic reform and trade liberalisation will fuel spending by public sector organisations and private enterprises to bring their IT levels up to international standards. The country will benefit from trade liberalisation, strong demand from the financial sector, e-government and broadband.

Industry Developments

In 2009, the Bahraini government started work on a 2011-2014 e-government strategy. The new threeyear plan was unveiled in 2010 with approval in time for implementation in 2011. Bahrain's e- Government Authority (eGA) worked with US networking giant Cisco to develop the plan. The eGA continued to work towards implementation of targets, with the number of cyber services to be increased to 130 in 2009 and 200 by 2010. Three new portals for Bahrain gate, mobile phones and public services were also launched. In 2009, the government cited a study showing 85% satisfaction with its egovernment strategy.

There was more innovation in the area of e-government in 2009. The High Information and Telecommunications Committee (HITC) announced plans to set up a company to help streamline government services. The National Portal also received an infrastructure upgrade, which increased its capacity tenfold and resulted in a more unified platform.

Competitive Landscape

The Bahraini PC market remains dominated by international players such as Acer, HP and Dell, with the strongest challenge coming from other multinationals such as Toshiba. The high demand for notebooks, which remains the most dynamic form factor, is reinforcing major vendors' position. In 2009, HP signed Metra Computer as a new distributor for its Personal Systems and Imaging and Printing Groups in the Bahraini market.

The software segment has seen some competitive manoeuvring as vendors love to take advantage of growing opportunities. In summer 2009, Microsoft continued to lay the groundwork for the launch of its new operating system, Windows 7, which was unveiled in October. Oracle benefits from a strong preinstalled base in the Middle East.

The IT services market is dominated by a few big vendors, with major local players including Zayani Computer Systems and Bahrain Business Machines (BBM). However, HP has strengthened its service capabilities in Bahrain through the purchase of NCS, a Bahraini company, resulting in a new company called HP Services Bahrain. HP also received a boost in Bahrain from its acquisition of Electronic Data Systems (EDS), which has its regional headquarters in the country, and a major client in Gulf Air.

Computer Sales

Bahraini PC sales were estimated to reach US$167mn in 2010, up from US$150mn in 2009. The computer market should grow at about 6% a year to US$243mn by 2015, according to BMI forecasts. Wireless connectivity will be one factor boosting demand for notebooks, stimulated by new technologies and infrastructure investment.

Software

The Bahraini addressable software market is projected by BMI at US$38mn in 2010 and is expected to grow at a CAGR of 8% over the 2010-2015 forecast period. In 2009, the economic slowdown meant that enterprises were tempted to focus more on the bottom line. The domestic software market is, however, is expected to grow steadily as Bahraini companies look to meet growing regional competition.

Services

The Bahraini IT services market was estimated to be worth nearly US$70mn in 2010 by BMI, accounting for around 22% of all IT spending in Bahrain. Spending on services is forecast by BMI to continue expanding as banks, telecoms companies and government agencies in particular invest in IT that will enable them to compete in a changing environment.

E-Readiness

Bahrain has among the highest penetration levels for internet and telephony of all Arab countries, alongside Qatar. Fees for internet access have fallen in the past two years, providing a boost to uptake. Bateleco's 3-5 year BHD21mn 'Broadband Bahrain' programme, providing national high-speed access to individuals and corporate users, should also drive adoption of broadband services.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.