For those who think the printer market can be a little dull at times, just take a look at the latest mergers and acquisitions (M&A) activity from the US. The boardrooms of Xerox and HP are a hive of activity after the latter rejected an audacious $30 billion takeover by the industry pioneer. Although Xerox is valued at around a third of the level of HP, it claims that a deal could create revenue growth of $1.5 billion.
This is just the tip of the iceberg. Away from the HP–Xerox drama, industry trends continue to reshape the market, offering distributors, vendors and resellers fresh opportunities as we enter a new decade.
Time for change
Overall, the print market fell into negative growth in 2019, thanks to a continued decline in sales of single-function devices. The future increasingly seems to be with multifunction printers (MFPs) that combine scanning, fax, photocopying and email with traditional printing. MFPs saw growth in 2019 and will continue to do so over the coming year, especially in consumer segments.
However, key MFP manufacturers are also in flux and many are moving their operations out of China due to concerns over the impact of a protracted Sino–US trade war. Southeast Asian countries will be the main beneficiaries of such decisions made by Ricoh (Thailand), Konica Minolta (Malaysia), Sharp (Thailand) and Kyocera (Vietnam). In Kyocera’s case, the cost of the move could run into millions of dollars – which highlights the potentially serious impact of these decisions on the bottom line.
MPS on the rise
Elsewhere, it’s clear that the strong performance of managed print services (MPS) in 2019 will continue into the new year, especially in the business segment where a steady pipeline of new models will excite customers. A strong MPS market is good news for distributors, who will have a great opportunity to partner with vendors to provide bespoke solutions for their customers.
The emergence of enterprise IoT-based services offering asset management, fault detection, smart analytics and remote monitoring presents a broader opportunity for MPS providers to participate in the IoT space and deliver greater value.
Security and strategy
What else can we expect in 2020? The importance of printer security and privacy capabilities will continue to grow as customers look for new ways to use their devices to create, consume and collaborate on content. With one in thirteen web requests leading to malware, and 500,000 new attacks each day, cybersecurity is a key factor in any purchasing decision and vendors are responding appropriately.
Another sign of the maturing of the market is the emergence of ink-tank devices. These typically have a greater up-front cost than classic cartridge-based printers but they hold much more ink, meaning fewer business interruptions. Sales are growing fast in countries such as Argentina, Brazil and Turkey, and European markets began to see the appeal in Q3 2019. Over the next two years, we expect sales growth to accelerate in Europe.
Inkjet (wide-format and production) and digital toner will continue to be the dominant processes in 2020, while five market segments will grow at a higher rate than others: packaging and speciality packaging, labels and wrappers, signage, direct mail and point-of-purchase.
Trust CONTEXT to provide your business with the latest market analysis and insights for the printer space as we head through 2020.
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