Israelis Switching to Tablet Computers; Sales Double in First Half of Year

Apple iPad grabs 38% of market, followed by Samsung at 25%.

Tablet computers are gaining ground in Israel and are no longer a niche product. Some 200,000 tablets were sold in the first half of 2013, nearly double the figure from the same period in 2012.

Israelis bought 198,000 tablets during the first half of 2013, an 85% increase over the 107,000 bought in those months of 2012, according to figures from an IDC Israel report.

“We saw that jump in the first quarter of the year. Compared to the 70,000 tablets sold during the first quarter of 2012, some 105,000 were sold in the first quarter of this year,” says Shay Horowitz, one of the researchers. “For businesses, tablets are still considered an accessory, but for households tablets are largely replacing netbook computers.”

Horowitz notes that the market also contains cheap tablets – “tablets being sold for NIS 300 at gas stations” – but questions whether they should be considered part of this market because they offer limited use. These tablets often are sold as children’s toys.

The country’s most popular tablet is still Apple’s iPad, with 38% of sales during the first half of this year. Samsung trailed far behind, with 25% of the market, followed by Asus, at 15%. But Apple is losing ground; during the first half of 2012, iPads accounted for fully half of all tablets sold in this country.

Among operating systems, Android tablets also are gaining market share versus Apple’s software.

But tablets aren’t cutting into the smartphone market. Some 1.1 million smartphones were sold in Israel during the first six months of the year, versus 783,000 during those months last year, a 42% increase.

“We estimate that 80% of phones sold in Israel are smartphones and 20% are older models,” says Horowitz. “That’s a high percentage by international standards, but we believe the current statistics will persist. There will always be people like foreign workers and the elderly who prefer simple phones.”

Off-brands on rise

The selection of smartphones available in Israel has increased, and more people are choosing not to go with the big name brands.

The most prominent phone brand in Israel is Samsung, followed by Apple; no surprise. What is surprising, though, is that both companies are losing market share despite releasing new models during the first six months of the year – Apple’s iPhone 5 and Samsung’s Galaxy S4. Samsung accounted for 35% of all phones sold, down from 40%, while Apple had 26%, down from 34%.

Israelis are becoming more price sensitive when it comes to their phones as well as other products, so cheaper smartphones – up to $400 -- are experiencing the quickest growth, says Horowitz. “The S3 is a great phone, as is the iPhone 4S, so it looks like the manufacturers are having a bit of a hard time creating new products.”

Chinese manufacturer Alcatel is the third most prominent in Israel’s smartphone market, with an 8.9% share. Its models include the Idol and Infinity series. The latter is identified with cellular service provider Partner.

Fourth is Nokia, with 8% of the market. HTC, Sony and LG also have a share of the market.

Blackberry is slowly fading from the market – only 1.5% of phones sold in the first six months of 2013 were Blackberrys, down from 5.4% during the parallel period last year.

Reuters