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Bahrain IT market is expected to pick up in 2010

The total size of the Bahrain IT market in 2010 is estimated at around US$366mn, up from US$345mn  in 2009. BMI expects a market compound annual growth rate (CAGR) of 7% for 2010-2014. The IT market is 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. Meanwhile, economic reform and trade liberalisation will fuel spending by both public sector organisations and enterprises to bring their IT levels up to international standards. The Kingdom will benefit from trade liberalisation, strong demand from the financial sector, e-government and broadband.

The Bahraini PC market remains dominated by international players including 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 recent 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. Meanwhile, Oracle benefits from a strong pre-installed base in the Middle East region.

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 had its regional headquarters in the Kingdom, and a major client in Gulf Air.

Bahraini PC sales are projected to reach US$194mn in 2010, up from US$184mn in 2009. The computer market should grow at around 6% a year to US$241mn by 2014, according to BMI estimates. Wireless connectivity will be one factor boosting demand for notebooks, stimulated by new technologies and infrastructure investment.

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