Tuesday, August 19, 2008

Andy Lippman, Lyra Research, Inkjet Supplies deep dive

Andy takes up where Charlie Brewer left off and drills down into the details of the inkjet market and implications for supplies vendors. Presentation is titled "Making Sense of a Complex Ink Jet Cartridge Market: Examining Worldwide Product Mix Trends".

Some highlights:
Canon has taken up a stronger low-end presence with a broadening product line and retreat towards higher-usage segments by Lexmark (and Dell) and Epson
Canon and Epson competitive strategies slow third-party suppliers, HP ink tanks more open to aftermarket, currently little aftermarket volume for Dell, Lexmark and Kodak
Average cartridge price points declining over time is putting pressure on third parties
North Amercian revenue decline over time (2007-2012) leads to worldwide reduction of -0.3% CAGR, but rest-of-world grows.

Inkjet biz looking to small offices for growth, example products include:
(PRINTERS)
Canon Pixma MX850 ($279), MX7600 ($399)
Epson Stylus C120 ($89), B-300 ($329), B-500DN ($549)
HP Officejet Pro L7590 ($299), Edgeline CM8060/8050 MFP ($19,000)
Lexmark X9575 Professional ($249)
Ricoh Gelsprinter Aficio GX2500 ($169)
Xerox Phaser 8560 ($699), Phaser 8860 ($2,499)
(INKS)
Canon LUCIA with PgR
Epson DuraBrite Ultra
Kodak Kodacolor Inks
HP Vivera Office, HP Edgeline Inks
Lexmark Evercolor 2
Ricoh GelJet Viscous Ink
Xerox Solid Ink

Total Cost of Ownership (TCO) is confusing -- Lyra has tested many combinations of printers/inks with widely varying results. Compares inkjets and laser printers as well. Monochrome versus color makes a big difference in how the products compare as well.

"Ink jet use is currently widespread in small offices. However, laser is replacing ink jet in developed economies and the preferred option in emerging economies"

"Non-OEM ink use is also common in SMBs. Channels and SKU availability are key to aftermarket penetration."

Does laser bias exist? "There are many attributes users consider beyond TCO. However, research shows that business customers prefer laser technology over ink jet in most cases."

NEXT SECTION of Andy's presentation: The Battle for Ink Cartridge Empties

HP's "closed-loop" recycling process
Also, Lexmark, Epson, major OEMs in Japan via post offices

Cartridge SKU fragmentation

NEXT: "Ink Cartridge Lifecycles are Shortening"
Andy offers lots of data, making the point that the market challenges continue for third-party suppliers

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