Reports > Research on Israel Mobile Internet Rebecca 3.28
Understanding Israel:Research on Israel's Internet and Mobile Internet Markets
2016 - 04 - 22

Preface:
According to an analysis of statistics done by Wikipedia, the English-language word that was edited most often, and was the most controversial, was "Israel." In the past, the media has largely focused on the Palestinian-Israeli conflict, the state of affairs in the Middle East, and other such political issues.But as Israel's technology companies continue to grow in prominence, Israel has become one of the most-mentioned countries by Chinese media. At the same time, Chinese capital from companies such as Baidu, Alibaba, and Tencent has begun to flow into Israel. All of this reveals one truth: now is the right time for Chinese investment in the Israeli internet market.


Understanding Israel: Research on Israel's Internet and Mobile Internet Markets was produced by Cheetah Global Lab in partnership with Libra. Cheetah Mobile's big data and data from third-party market research were both harnessed to conduct a comprehensive evaluation of Israel's Internet and mobile Internet markets.In this report, the data used in sections on Israel's mobile gaming market and its mobile phone security were obtained through the everyday operations and data collection of Cheetah Mobile product Clean Master and do not represent a violation of user privacy.


I. Macro-Environment of Israel's Internet Market
(I) The Israeli Internet industry is mature

The Internet has already become one of the four main pillars of Israel's high-tech economy; the others are biotechnology, software, and mobile communications.


Israel's mobile phone penetration is 132%, and 74% of the population has a smartphone. The country ranks third in the world in the pervasiveness of smartphones, behind only South Korea and Australia, and among smartphone users, only 50% use iPhones.

Data Source: Pew Research


(II)  A Portrait of Israeli Internet Users



Data Source: Libra


II. The Israeli Internet Investment Environment


(I) The Second Silicon Valley - Israel

Israel has been called the Second Silicon Valley. Data such as those from MappedinIsrael show that Israel is currently home to about 5,000 high-tech startups. Over the past five years, this number has grown at an average yearly growth rate of 10%.


Given the fact that Israel is a small country with a population of only about eight million, yet still sees the founding of two to three startups each day, it is no exaggeration to say that it is a country of entrepreneurs.


(II) Investment and entrepreneurship generally takes place in a few main sectors

Data Source: IVC Research Center


(III) The future direction of investment and entrepreneurship in Israel

Looking at the state of investment in Israel, one can see that the industries of communications, biotechnology, and information technology and enterprise software services together account for over 60% of the volume of all business transactions. Most financing takes place in transactions less than $5 million.


  An examination of the development of the information technology and Internet industries in Israel reveals that information security, the mobile Internet, video apps and big data are all hot topics and major trends in development at present. This is particularly true for Israel's network security industry, which is a global leader.


Currently, Israel is home to over 300 network security companies; in 2015, when the scale of the country's security industry grew by 25% compared to the year prior, 81 new network security startups were founded there. This makes Israel the number-two country in the entire world, behind only the United States, in terms of the scale of its security industry.


(IV) The startup market in Israel hit a new high in 2015

In 2015, Israel set a new record for startups. 373 companies obtained financing, totaling $3.58 billion (a total that includes only financing of over $500,000). This is 64% higher than the total sum of startup financing that took place in Israel the year prior, when 297 companies obtained financing totaling $2.2 billion.


(V) Chinese capital is flooding into the Israeli technology sector

Prior to 2013, Chinese capital appeared in investments in the Israeli agriculture industries. After 2013, the focus of Chinese capital began to expand gradually to include Israel's technology sector.


Relatively active Chinese investors in the Israeli market include: several large Internet enterprises, industrial companies in the medical industry, and individual private placement equity sharing investment organizations. They mainly invest in the Internet and the mobile Internet, as well as cleaning technologies and medical equipment.


(VI) Investments in Israel by the world's Internet giants


III. The Current State of Israel's Mobile App and Game Market

(I) Israel users' App use

1. The Internet is influencing and changing the way in which Israeli users' methods of social interaction.

  Communications, social, and tool Apps are the three categories most preferred by Israeli users.



Data Source: Libra


Results from a recent survey conducted by Bezeq, Israel's largest telecommunications group, show that Israelis' social interaction habits and entertainment choices are experiencing dramatic change due to the influence of the Internet:


• Approximately 40% of Israelis across all age categories had become friends in real life with those they met online;


• 63% of Israelis stated that the Internet was the main way in which they viewed television or movies;


• 80% of Israelis buy airline tickets and reserve rental cars or hotel rooms online, while only 20% choose to make their vacation arrangements with a travel agency.


2. WhatsApp is extremely popular in Israel.

Although it is located in Asia, Israeli users' App preferences are quite similar to those of US users and unlike those of Chinese users, who prefer WeChat, Korean users, who use Kakao Talk, or Japanese users, who prefer Line. The most popular App among Israel netizens is the chat software Whatsapp. At present, WhatsApp is the most frequently used App for 47% of Israeli users. Google Play comes in second, while Facebook comes in third.


Data Source: Libra

3.Rankings of Israeli users' most preferred non-game Apps



(II) The Current State of Israeli Mobile Gaming Usage

1. Israeli users absolutely love warfare, combat, and strategy games

Israel has long been in conflict with neighboring Arab nations. This conflict is an ever-present part of their lives, and this is clear from their activity levels in different gaming categories. For example, highly stimulating games such as arcade games and action games are very popular with Israeli users.


At the same time, the average level of education in Israel is quite high, so Israelis also love puzzle and strategy games.

Data Source: Libra


The Current State of the Gaming Market

(I) The gaming Apps Israeli users like best

Although Israel is a major country for entrepreneurship, only one local game (number seven) made the rankings of the top ten gaming Apps. This shows that gaming is not a mainstream sector for entrepreneurship in Israel.

Cheetah Mobile's Piano Tiles 2 is among the top ten most downloaded games in Germany, France, the United States, and South Korea, and it has performed similarly well in Israel, where it claims a spot among the top three.



Data Source: Libra

(II) Analysis of representative Apps in Israel

1. The app most familiar to Chinese users - ICQ

In July 1996, Israelis Sefi Vigiser, Arik Vardi, Yair Goldfinger, and Amnon Amir founded Mirabilis, and in the same year released the first real-time online messaging software in the world, ICQ (which stands for "I seek you").

With the help of ICQ, QQ established a strong penguin empire.

QQ modeled itself on ICQ, but judging by Libra's new data, QQ and ICQ have not been on the same level in terms of number of users for a long time. At present, Tencent (which owns QQ) has already become one of the largest providers of comprehensive internet services in China.



2. The fastest-growing map App - Waze

Waze, a crowdsourcing and free navigation app, was established in 2008 in Israel, where its company as first known as Lingmap. Like many navigation maps, it provides navigation services precise enough to show each turn, but with the help of its tens of millions of users, Waze has more accurate information about traffic flows and which roads are blocked by roadwork. As soon as a certain road begins major maintenance, drivers in Israel automatically open up Waze to find a detour. Waze secured $30 million in Series C financing in late 2011, and was acquired by Google in 2013 for $1 billion.



3. Must-have Apps in times of war: Red Alert and NowForce's SOS

Red Alert obtains information about the firing of missiles from the Israeli Defense Forces and Homefront Command, and users can receive a warning on their mobile phones whenever Homefront Command issues a red alert. Users, in addition to receiving the warning alarm, may obtain accurate firing time, precise to the second, as well as the city struck by the missile. What's more, the feeds of two broadcasting channels can be received via Red Alert, which makes it convenient for users to obtain the latest news during times of combat.


NowForce's SOS has a two-part system. One part is for the user: downloading the App makes it convenient for the user to send a distress signal in an emergency situation. The other part is for any emergency response organizations, such as firefighting teams, security bureaus, or medics, registered on the NowForce platform.


IV. The Current State of Mobile Phone Security in Israel

According to data obtained with Cheetah Mobile's CM Behavior Cloud, android users in Israel have a virus infection rate of 2.22%, which is to say that among every 100 android mobile phones, an average of 2.22 are infected with a virus. Among viruses infecting mobile phones, root viruses make up the largest category at 22.98%, and the data from 2015 shows that December saw the highest rate of infected mobile phones.


Note: A higher infection index indicates that more mobile phones were infected during the month in question


Top 100 Viruses Infecting Mobile Phones in Israel


1

Fakegupdt

2

Ghost Push

3

Hide Icon

4

downloader

5

PermAD

6

Fobus

7

danPay

8

Fake App

9

tiak

10

Installer.app


VI. Notable Israeli Internet Companies



1. ironSource

ironSource is a globally renown software development and monetization platform. It can assist mobile phone software developers to conduct relevant ad placement in order to find consumers, and can insert adds within Apps. This company is one of Israel's unicorns: After drawing $150 million in another round of funding in February 2015, its valuation was over one billion. ironSource landed in Beijing in May 2015, and in September of that year announced that it had officially merged with mobile app monetization and promotion platform Supersonic. Its monthly uses total an astounding 500 million.



2. Checkmarx


Checkmarx aims to make computer code safer. It solves a major problem for App developers by ensuring that their code, when downloaded, does not have any security vulnerabilities or risks. The company can also prevent malicious attacks in real-time and repair code. Checkmarx is another noteworthy unicorn in the Israeli technology sector. In June 2015, it obtained $84 million in financing (if Salesforce's early-stage investment is included, the total becomes $92 million). The company has 130 employees located in offices all over the world, including in Israel, England, India, and Singapore.



3. TabTale

TabTale is an Israeli game developer. From the time it released its first App in 2009 to March 2015, the company's 350 games have been downloaded over 600 million times. In its early stages, TabTale mainly developed e-book Apps for children, but later pivoted toward the children's education and leisure gaming market. At present, it is a world leader in children's mobile games. In 2013, the company was even ranked among the top ten mobile gaming developers in the world.



4. Umoove

Umoove is an Israeli startup that has developed unique algorithms capable of tracking eye and face movement in real-time. Their software makes it possible to play games and turn pages with a shake or nod of the head, as well as to communicate with one's family through subtle eye movements. Unlike other similar products, Umoove's not only provides an extraordinary user experience, but requires no extra hardware support. It has uses in the gaming sector as well as in medicine, and it can detect early signs of strokes, autism, ADHD, Parkinson's disease, glaucoma, and other illnesses.



5. Askourt

Askourt is a very cool social platform for e-commerce stores. It utilizes a B2B2C model to connect the platforms of brands and social media. Askourt can allow users to share products they are buying online with their friends on social media platforms in order to solicit their advice about purchasing. It has been reported that after Israel's largest e-commerce store partnered with Askourt, its online activity increased tenfold. Askourt is currently also conducting testing on WhatsApp.


Aside from the traffic generated for e-commerce platforms and brands, Askourt can also conduct analysis with its big data to determine the latest popular trends. Additionally, it also works on O2O channels as well as fashion brand distribution vendors. At present, Askourt has hundreds of thousands of users and is currently seeking a strong e-commerce partner in China.


VII. Conclusion

Globally, Israeli technology and Internet companies' ability to innovate is second only to that of US companies, and the diversity of their technological innovation far surpasses that of Chinese companies. Over the past two years, the investment of Chinese capital in Israel has gradually spread from the traditional industry of agricultural to the Internet, in large part because Chinese companies have developed a respect for Israeli Internet companies' limitless capacity for innovation. Israel's startups, in turn, have been drawn to China's large market, and have raced to establish offices or branches in China. In the Internet security, virtual reality, mobile medicine and smart hardware sectors, the outlook for Sino-Israeli cooperation is excellent. In 2016, augmented reality and virtual reality are expected to develop explosively worldwide, so Chinese Internet companies may seize this opportunity by setting up related companies in Israel.


About Cheetah Global Lab

Cheetah Global Lab is an institute dedicated to internet research founded by Cheetah Mobile. On the basis of over two billion app installations and 567 million monthly active users of Cheetah Mobile, we conduct original research to gain new insights about the mobile industry. We gather, analyze and publish users' behavior data on a regular basis and produce original reports, articles, and white papers based on these findings.


  Cheetah Global Lab also shares important findings with entrepreneurs and other tech leaders to assist them in innovating in their respective fields through regular salons and meet-ups. We are creating a vibrant offline community around Cheetah Global Lab with a large annual summit and smaller networking events.


About Libra

  Libra is a platform for the analysis of big data founded by Cheetah Mobile. With a sample pool of almost 50% of the world's Android users and Cheetah Mobile's big data technologies, Libra conducts deep analysis of user data. Through analytical reports, data products, and case studies, it provides users with information about the changes and trends in the global mobile Internet market.


  Libra aims to help developers, investment companies, marketing professionals and industry insiders to gain a multidimensional, comprehensive, and deep understanding of the mobile Internet market's past and present, so that they can spot opportunities in the industry and grow rapidly along with the rapidly developing mobile internet market.

Copyright Clarify
Copyright ownership of data, conclusions, images, graphics and other components in this report belongs to Libra.Any media, websites, individuals or organizations share not be uploaded, posted, modified, distributed, reproduced, or used in other ways without permission.