Tuesday, August 19, 2008

Charlie Brewer's overview continued -- Laser Hardware and Supplies

Charlie Brewer -- Laser printer hardware and supplies market overview:

Price performance ratio keeps improving
Hardware margins still shrinking as prices are compressed
Cost per page on low end is going up (20cents from 12 cents a few years ago)

Most segments are experiencing a shift in page volumes (pages are migrating to lower-end machines)
Monochrome dominates and the installed base is growing but the population of color devices is rapidly expanding
MFPS are in demand
Competitive landscape is changing
*Copier companies offer more low-priced MFPs
*Printer vendors also offer more MFPs
As shipments decline, the installed base of monochrome hardware continues to grow
New sub-segments are enjoying strong demand
OEMs are committed to monochrome
BUT Color Hardware Market is Maturing
Vendors fill out product lines in various categories
Prices are stabilizing (2006 saw demise of the $300 color laser barrier, now $200-$250 is seeming to hold)
Cheaper prices allow color lasers to further penetrate SOHO market

Firms are investing heavily in Toner and Cartridge Businesses
(Canon, Xerox, LG Chen, Mitsubishi, Tomoegawa)
Pulverized toners vs CPTs (chemically produced toners)
OEMs continue to move toward CPT (Xerox, HP, etc)
Various firms stress the "greener" aspects of CPT

Trends in the cartridge market
Printer populations fuel demand for supplies
Cartridge shipments and revenue are up
Third-party supplies gaining market share
Fierce competition between all players
OEM vs OEM; OEM vs Reman; Reman vs Reman
Persistent rumors that new-build cartridges are entering the market

Color offers revenue opportunities
Growth in units and revenues up through the end of the decade
Prices show no signs of eroding
Good news and bad news for third parties
Aftermarket gaining share in various segments of the color cartridge market
Wider availability of toners and parts allows third-party cartridges to come to market quickly
Cheap empty cores remain readily available
End users are looking for ways to control printing costs

Conclusion on laser:
Populations are changing
The market for cartridges is growing
Conventional ground toners remain important but CPT is gaining ground in various segments

Interesting question at the end: any evidence of companies shifting to third-party (i.e. cheaper) supplies as economic woes around the world mount -- Answer, not sure about that, but downturn in print-intensive banking, finance, etc, may be leading to reduction in print volumes.

Related question: will worldwide component price increases lead to higher prices in toner? Answer, not so far.

Another question: buy a computer, get a free printer, still popular? Answer, defintiely not so popular, partly because printer OEMs learned recipients of "Free"printers don't use supplies nearly at the rate that other users do.

Question about purchase price of inkjet cartridges, OEMs learned it's good to lower purchase price with lower volumes for some customers.

As OEMs seek heavy usage customers, how's it going? Photo printing was a promise but it's declining. Indicative of this ongoing effort is the interest of inkjet OEMs on the office market.

No comments: