Printers: Win Some - Lose Some

It often springs surprise when any of us spends money on printers in this digital age. The trends over the year on printer market sales are in line with this perception. While decline in overall print consumption is a source of worry, that does not mean organizations and individuals will shun printing. That's the hope this market rides on. Experts do not disregard the role of a printer yet see it as an equipment limited to a few business functions than it was. The digital document management is in vogue and is so handy that the perception with which people lived about hard copies now seems to have taken a downward path. The volume of work which offices and individuals preferred to do with the help of printers is easily bypassing them.

But it does not mean that printers do not have role in today's or tomorrow's world. They are still an integral part of the business lifecycle. It will be perhaps a bit too early to predict if their importance is getting reduced in most business functions. Notwithstanding, their role is getting redefined. This is apparent in the DQ Top20's analysis of the printer market for FY12-13. The growth figures have hit the dead end for printer market. The picture appears lopsided when figures are classified into segments such as dot matrix, inkjet and laser.

THE SHADOW IMPACT

The IT industry is going through a tough time and FY13 was a mixed bag. The printer segment was equally the victim of this sentiment. But domestic issues had played a role to dampen the buyer mood. The rupee slid further, forcing vendors to raise prices. Even if many of them did continue with the same prices, they had to shun the margin giving jolt to their channel partners who in return did not show interest in putting the printers in the front row of their sales counter.

The vendors had to struggle to improve sales in the light of the fact that many large enterprise customers did not show eagerness to upgrade their infrastructure.

THE INNOVATION CURVE

India's printer market saw a steady shift from single function printers to multi-function printers that combine scan and copy functions.
There has been a major shift in demands of laser based MFPs. In FY13, vendors such as HP and Epson tried their best to resuscitate the inkjet market through their B&W inkjet offerings. However, the move did not result into sales. Technology to ensure cloud computing compatibility also had traction. A lot of stress was laid around printing cost. HP and Epson tried to reap on these issues through their range of printers to improve the printing performance against a cartridge. Owing to general inflation and high interest rates, there was a standstill on investments in expansion which is evident from the fact that the national retail chains like Croma did not expand.

MARKET AT A GLANCE

In this backdrop, Indian printer market has been found going through a rough patch in FY 13. Due to a significant downfall in numbers in segments such as Inkjet and Dot Matrix printers, the overall market hit the dead end. In FY13, the total size of the printer market stood at `2,090 crore as compared to `2,113 crore in FY12. Thus, the market suffered a de-growth of 1.1%. It is obvious for peers to interpret the numbers in different ways. One thing which has surfaced in our analysis is that the Indian printer market is going through a transitional phase and reinventing its ways to settle in a world where printing needs are getting a different shape. For instance the category which gives a ray of hope is the laser category that is growing in double digits. This also means that printers like dot matrix and inkjet are perhaps not able to serve the need of the market.

SINGLE-FUNCTION INKJET PRINTER

Inkjet printers have gone down. According to our estimates, the market for single-function inkjet printers declined significantly to `50 crore in FY13 with 37% decline over last year's revenue of `80 crore. Clearly, consumers are not showing any interest in a technology which is cheaper on upfront investment but consumes more in the long run. Moreover, despite advancements in technology the inkjet has not reached the efficiency levels which laser technology is capable of.

HP has been an undisputed leader with more than 60% market share followed by Epson (26%) and Canon (11%). Since the market is squeezing, there are only few players left which share the pie. It is probably the single-function inkjet printers that would be out of the market in few years from now. Yet, any technological shifts might change the fate but that is a far-fetched thought and highly unlikely.

MULTI-FUNCTION INKJET PRINTER

The downward trend continued with multi-function inkjet printers also, though decline was only to the tune of 5% as the market stood at `190 crore in FY13 over `200 crore in FY12. HP is the leading player with 69% market share, followed by Canon and Epson with 15% and 13% market share respectively. As against the single-function inkjet, this segment is yet to stay in the market. It would be too early to say anything regarding this category because of the demand for colored prints. But the degrowth is purely pointing towards a change this category needs.

SINGLE_FUNCTION LASER

Among printers, laser printer is the only segment where sales grew positively and the growth rate was around 14% over the last fiscal year. The consumption went to 1.57 mn units from 1.38 mn units.

Single function laser market stood at `710 crore in FY13 over `620 crore in FY12. The market leader was undoubtedly HP with market share of 49%. Canon is closely chasing it with 36% while Samsung is way behind. However, the market is attracting a number of global players. Ricoh also tried to cash on the pie last year.

MULTI-FUNCTION LASER

Demand for multifunction printers is increasing as they enhance productivity and functionality for an organization. Other factors pushing the adoption include higher level of efficiency, lower total cost of ownership, high quality prints, easy of use, and value the MFDs offer.

With a multifunction color laser printer, one can create, communicate, collaborate, and go green. It is believed that soon the MFP market will outpace the single-function in all categories.

HP is leading in this category with market share of about 38%. Samsung is competing at the second place with 27% while Canon is at the third place with 23% market share.

THE JOURNEY HEREON

The printer market may have contracted in the last one year. But there is still some hope. The market is taking a turn to newer business models. As discussed earlier the market will not look the same as it used to be. That is why sales of inkjet and dot matrix printers have taken a sharp downfall.

But the steady growth in the laser printer, both single and multifunction, to the tune of 14% indicates towards the consumer behaviour.
While it is a good news for traditional players like HP, Canon, Samsung, etc, that laser market is on the rise and will continue to perform better in the coming years, it brings a bouque of challenges too since a number of small players are witnessing the trends and want to jump in the fray with more models and offers to customers with competitive prices. Brother strengthened its portfolio with new launches in the Indian market recently.

It rolled out three new mono laser products to its existing wide portfolio of mono laser, colour and inkjet multifunction centers and printers.