ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the April 2006 issue


The computer and Internet markets

IDC: Israel's computer market is growing
The Israeli computer market, experienced healthy growth in 2005. IDC Israel Ltd., the leading computer data consulting company, released data on Israel's PC market in 2005, showing substantial across-the board growth in all segments. PC sales grew by 11.2%, mobile computer sales rose by a third, and server sales increased by 37.7%.

Israel's PC market totalled $507 million in 2005. Hewlett-Packard Company (NYSE:HPQ) had the largest market share, with 14% of all units sold, and 17.3% of the market in dollar terms. IBM (NYSE:IBM), including Lenovo Group Ltd. (Nasdaq:LNVGY.PK; HKSE:992), was in second place, accounting for 11.5% of all units sold, and 13.8% of the market in dollar terms. Dell Computer (Nasdaq: DELL) was in third place, with 7% of all units sold, and 9.1% of the market in dollar terms.

Israel's laptop market totalled $209.1 million in 2005. IBM, including Lenovo, had the largest market share, with 18.1% of all units sold, and 27.6% of the market in dollar terms. HP was in second place, with 16.8% of all units sold, and 21.8% of the market in dollar terms. Dell was in third place, with 7.7% of all units sold, and 8.7% of the market in dollar terms.

IDC Israel is predicting an 18.9% growth in laptop sales
1.2m Israeli households connected to Internet
1.2 million Israeli households had an Internet hook-up at the end of 2005, 9% more than the 1.1 million hooked up at the end of 2004, according to a Business Data Israel survey.
Internet hook-ups expanded more slowly in 2005 than in 2004, which saw 22% growth compared with 2003.
BDI also found that the proportion of households with a high-speed Internet hook-up is one of the highest in the world - 45% of all households in 2005. BDI found that at the end of 2005, Bezeq Ltd. (TASE: BEZQ) had 700,000-720,000 high-speed Internet subscribers, a market share of 63-67%. Combined cable brand HOT had 360,000-390,000 subscribers, a market share of 33-37%.

At the end of 2005, over 90% of household Internet hook-ups were high-speed Internet. The proportion of Internet subscribers with high-speed Internet hook-ups has thus grown greatly in recent years.



Reprinted from the Israel High-Tech & Investment Report April 2006

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