28.09.10
Kodak Inkjet news
IDC estimates that the total Western European market for inkjet MFP and printers was almost 18.4 million units in 2009 down almost 9% year on year (Y/Y) and down by more than 4 million when compared to shipments in 2007.
The recession has inevitably played a huge role in this trend with IT budgets slashed by consumer and corporate users, and hardware purchasing plans kept on hold until brighter days. Nevertheless even before the financial turmoil triggered the sharp drop in private consumption at the end of 2008, the inkjet market was already showing first signs of saturation having clearly peaked in 2007.
More importantly, sales of inkjet supplies did not recover during the economic downturn. IDC estimates that sales of genuine original inkjet consumables in the UK fell by almost 16% Y/Y in 2009. By the end of 2008 and through the first quarter of 2009, faced with shrinking revenues and the prospect of a long and painful recession, the vast majority of inkjet vendors bravely adopted a supplies price increase strategy. IDC observed an increase in the region of 14% on average in the recommended retail price of inkjet cartridges in the first half of 2009 Y/Y in Western Europe. The UK market was the worst hit with increases averaging above 20% as a result of the pound devaluating against the dollar. Unsurprisingly, once the price increase was passed on to the distribution channel and consequently to resellers, the move generated discontent among users and many switched from genuine consumables to third party products. IDC estimates that third party inkjet shipments grew by 11.4% and 9.8% in the first and second half of 2009 respectively Y/Y representing 33.5% of total unit market share.
Conversations between IDC and third party providers suggested that refillers and DIY refill providers were the first to acknowledge the trend followed by remanufacturers and new built compatible manufacturers. Despite the increase in the price of original equipment manufacturers (OEM) ink, supplies revenue fell sharply and, as this represents the greatest font of revenue for inkjet hardcopy vendors, total OEM revenues also inevitably plummeted across the inkjet industry.
In Q4 2009 and Q1 2010, the inkjet industry showed some positive signs of recovery. OEM vendors are reporting more stable revenues. However they are faced with increasing competition on two different levels. First of all, during the initial printer sale, competition has driven retail and on-line prices to record low levels and has often given into additional discounts, cash-back offers and extended guarantees. And then again later, inkjet vendors are faced with competition coming from third party inkjet solutions often up to 50% cheaper than OEM prices. The consumer offer often becomes very unclear and confusing. Cartridge yields are still not clearly stated on packaging making it difficult for users to make like-for-like comparisons. To add to the confusion, original consumables replacement sets could comprise a relatively cheap black cartridge but a highly priced colour one so, dependant on what the consumer is printing, this may not offer any better value. However, vendors are now starting to face more informed customers that consider the total cost of ownership (TCO) as a priority when purchasing their printing device whether this is for office or home use. Survival in such a competitive market dictates that vendors adopt a new business model. Recent developments in the inkjet market suggest that various feasible approaches exist for OEM vendors to offer better value to customers and defend their supplies business from third party competitors.
The test-marketing of a cartridge-free inkjet printer has recently generated curiosity throughout the industry. The device would be equipped with 8,000 page yield fixed ink tanks and could be refurbished twice through its life time. This option could lock out aftermarket competition whilst potentially offering an outstanding cost per page for users. However IDC research shows that not many users print as many pages in the entire lifetime of an inkjet printer hence it is hard to imagine customers prepared to pay upfront for that number of printouts.
Individual colour ink tanks are often regarded as the best value option on the market, as they offer the advantage of not having to replace all of the three colours when one runs out. They usually retail at lower prices than integrated cartridges and can truly mean better value especially for users that tend to run out of one colour faster than the others. However photo-printers often require as many as 6 individual colour ink tanks to function, hence the cost of replacing the entire cartridge set can become prohibitive. In recent years, with an increasing demand for photo-printing, users have quickly realized the high cost of printing pictures at home and have been attracted back to the cheaper options of retail and on-line printing.
www.kodak.co.uk
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