Printer markets have become increasingly healthy over the recent years and are currently robust, although, as always, they remain competitive. However, sales of printer hardware through distributors in West Europe (WE) were sharply down by -4.2% year-on-year in Q1 2019, according to the latest distribution data published by CONTEXT, the technology market intelligence company. “This is not a surprise: the first quarter is, historically, the weakest of the year – and it is usually followed by a weak second quarter”, said Antonio Talia, Head of Business Analysts at CONTEXT.
Sales of multifunction printers (MFPs) were down by -1.7% year-on-year: even though laser MFPs saw a sharp growth of +4.6%, this was offset by the negative performance (-3.4%) of inkjet MFPs that account for almost 78% of sales in WE. Sales of single-function printers (SFPs) registered a strong decline (-13.6%) and contributed to the overall negative performance in Q1 2019. The ongoing shift from single- to multifunction devices is likely to be further consolidated with distributors reporting that reseller demand for SFPs, particularly lower-spec models, is low. Laser MFPs saw growth of +4.6% in Q1 2019, driven by the exceptional performance of consumer-targeted devices (sales up by +80%), especially monochrome printers (sales up by +113.1%), which is primarily due to falling ASPs as distributors use promotions and discounts to clear stock and get ready for the arrival of new models.
Consumer printers as a whole steadily increased their market share and drove overall imaging growth in Q1 2019, as they had done in 2018. Sales of business-targeted models, which account for 83% of laser MFP sales and 92.8% of revenue, dropped by -13.4% (leading to a fall in revenue of - 5.5%), mainly because the ASP is continuing to increase. This suggests companies (small and medium businesses) are replacing entry-level business-targeted models with mid- and high-level consumer- targeted devices.
Inkjet MFPs reversed the positive trend seen in 2018 with volume sales declining by -3.4% in Q1 2019. However, revenues were up by +2.3%, helped by increased sales in mid- and high-price ranges and driven by sales of monochrome and A3 devices, which saw revenue growth of +60% and +20.7% on the previous year. It is interesting to note the exceptional growth of A3 printer sales in the consumer segment (+145.4%) – another factor suggesting that SMBs are buying consumer inkjet devices with greater functionality to fulfil their commercial needs.
Imaging sales and revenues declined in almost all WE countries in Q1 2019. Italy was the only top 5 WE country which continued to register a positive year-on-year performance in terms of both units and revenues. Spain also saw growth of both units and revenues in Q1 2019, reversing the negative trend of 2018.This positive performance was driven by mid-range and high-range consumer devices, and by brands such as Kyocera (sales up by +149.3%) and Epson (+11%), even though these have a combined market share of only just over 22%.
In the United Kingdom, where consumer confidence is low amidst Brexit-related uncertainty, last year’s positive trend was reversed and sales (units and revenues) declined in Q1 2019. There were falls in both consumer and business segments, and significant drops for brands such as Ricoh (year-on-year sales down by -90.5%), OKI (-36.8%), Epson (-34.3%), Lexmark (-9.9%), Canon (-9.1%), Xerox (-4.9%) and Brother (-3.5%), although other companies, which share 59.4% of the country’s printer market, saw smaller declines.
Germany and France continued to register negative year-on-year changes in volume sales and revenues, with strong falls in both consumer and business segments. This had an effect on all the brands which share over 94% of the printer market in these countries. Looking ahead, the market is likely to see other changes alongside the ongoing shift from single-function to multifunction printers.
Managed print services (MPSs) that allow customers to transform their workplaces from paper to digital will continue to expand in 2019 as distributors and retailers use their partnerships with vendors to provide comprehensive, cloud-based MPS solutions to consolidate workplace printing. The emergence of enterprise Internet of Things (IoT) platforms offering asset management, fault detection, smart analytics and remote monitoring presents a broader opportunity for MPS providers to participate.
“Over the next one or two years, we expect to see relatively fast growth in sales of production-standard inkjets, wide-format printers (both digital and inkjet), and digital toner-based devices”, added Antonio. “However, the five-specific print-market segments that are likely grow at a relatively higher rate are packaging and specialty packaging, labels and wrappers, signage, direct mail and point-of-purchase.”