Across almost all fronts, the printer market performed better than expected in the second quarter of the year. Overall, Evans Research Corp. (ERC) had forecast total shipments of 533,023 units in the second quarter. The tally for the quarter was considerably higher at 566,976 units. While this ultimately means that the forecast for the year has been adjusted upward by almost 80,000 units to 2,625,132 units, it is more important to discuss the dynamics of the market.
For a number of years ERC has believed that laser technology would continue to erode the dominating share of inkjet technology. Laser technology in ERC’s opinion is far more robust than inkjet technology. The primary obstacle to the shift to laser technology has been price and perhaps more importantly the price of colour. Several years ago if we wanted colour for the home and to a lesser extent business, there was really only one choice – inkjet. At the consumer level we were looking at sub-$100 inkjet units versus sub-$2,000 colour laser units. Similarly, business users would be faced with a similar situation for higher end inkjet and colour laser products.
Even if we didn’t care about colour but just simply wanted a printer we were still faced with sub-$100 colour inkjet products and sub-$400 mono laser products. If we wanted increased functionality, vis-à-vis the MFP, we were looking at sub-$300 inkjet MFPs and sub-$1,000 mono laser products.
Through 2008 ERC believes the market for general-purpose printing will flatten out between 2.6 and 2.7 million units. So it is only the mix of technologies that we need to be concerned with. As stated, ERC believes that mono and laser technology will erode the dominating share of inkjet technology. Within the laser segment, single function colour lasers and mono MFP lasers will erode single function mono laser share. Eventually, colour laser MFPs will erode the shares of both with the laser segment. At the same time, inkjet MFPs will eat away slowly at the share of single function inkjets within the inkjet space. All of these assumptions are and always have been tied to price.
Fast forward to the first half of 2005 and we find sub-$500 colour laser printers, sub-$200 single function mono lasers and sub-$400 laser MFPs. The business and home user now has choices.
In 2004, laser technology accounted for less than 15 per cent of all shipments. This year, laser technology is expected to account for 19 per cent of total shipments. By 2008, the laser proportion is conservatively estimated at just over 23 per cent. Within this figure, colour laser and laser MFPs are expected to account for nearly seven per cent of the overall market each. Consider that in 2004, these two technologies accounted for a combined four per cent share of shipments.
Earlier we discussed the need to adjust the overall forecasts because of the strong performances of a number of segments. Considering the two combined inkjet technologies, ERC had expected shipments of approximately 434,000 in the second quarter. The tally was above 446,000. In contrast, ERC had forecast shipments of 90,500 laser products in the second quarter and the total for the quarter was 111,000 units. It is clear to see where current and future growth will come from in the printer market.
