Israel Information Technology Report Q2 2016
BMI View: We downgrade the estimate for 2015 in the Q216, but we believe this will prove a temporaryblip in performance and forecast total IT market spending will increase at a CAGR of 5.5% 2016-2020 to atotal of ILS29.2bn. The maturity of the country's hardware market means that segment will underperform,but income growth trends point to opportunities at the premium end of the market. Meanwhile IT servicesare forecast to be the outperforming segment, with the adoption of cloud computing service expected todrive the market. Israel also offers a vibrant ICT start-up community and highly skilled tech workers, withinnovative solutions fuelling high levels of investment in 2015 following on from a record-breaking year in2014.
Latest Updates & Industry Developments
We forecast the Israeli IT hardware market will expand from ILS6.25bn in 2016 to ILS6.95bn in 2020,corresponding to a compound annual growth rate (CAGR) of 2.6%. Overall market growth will besubdued, but our income analysis points to a significant opportunity at the premium end of the market.
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