The short, sharp shock of the Credit Crunch in 2008 put paid to the continuous rise of the peripheral market; although there was a recovery in 2009, almost every other year has seen a decline in revenue for most of its elements (see Figure). Having reached a plateau in 2016, the market is now growing once more.
The ‘peripheral’ market includes digital cameras for capturing analogue images, mice, pointers, drawing tablets, 3D headsets, and video cameras (included in the ‘other hardware’ category); most importantly it includes laser and ink jet printers, their supplies (various paper and card for printing, ink and laser cartridges) and peripheral services, which encompass document and print services – typically for large company customers. You’ll want to learn more about how this market is developing.
The peripheral market grew by 2.9% in Q2 to $54.7b and by 1.3% in the year to the end of June to $223b. Component parts of the market (see Figure) had varying successes, with laser printers (-2.8% in the year) and digital cameras (-0.5%) declining, while revenues from ink jet printers (+10.0%), supplies (+5.7%), peripheral service (+3.6%) and other hardware (+3.3%) grew.
Canon and HP are still the world leaders in both the printer and overall peripheral market (see Figure), although the gap between the 2 is less in the former than the latter area. In terms of the make up of the annual market to the end of June by element, supplies were the largest (36.2% of revenues), followed by laser printers (17.3%), digital cameras (14.8%), peripheral service (11.5%), ink jet printers (8.6%) and other hardware (11.5%).
Looking at printer market revenues for the leading vendors by quarter (see Figure) we can see the extent to which the fortunes of Canon and HP Inc. are interlocked at the top; it’s an intriguing feature of this market that HP Inc. continues to use a Canon engine in its laser printers. Xerox has performed worst of all the leading suppliers and has changed its strategy considerably, selling off its outsourcing business to Atos in 2015 and splitting out its BDO operations into Conduent in 2016. The other major vendors Kyocera, Brother and Epson have had a more stable journey.
The challenges for printer suppliers is the ever increasing resolution of computer, tablet and phone screens, which reduce the amount of hard copies uses need to check their documents; for digital camera manufacturers they include the inclusion of cameras in almost all mobile phones, laptops and tablets. The ‘digital transformation’ of analogue business and government processes also means that more of our transactions and interactions are done over the Internet, rather than through the post. To succeed as a printer supplier you need deep R&D investments (every printer is a proprietary product protected by patents), an installed base in the tens of millions and an efficient supply chain for both manufacturing and the distribution of products and supplies. You’ll also need a business plan that includes expansion into new areas (especially solid printing, 3D headsets and cameras) and the ability to withstand falling margins. Your best opportunities will probably come from competitors changing their strategies (Dell’s merger with EMC, HP Inc’s. split out from HP. Lexmark’s decision to exit the ink jet market, etc.) than from an uptick in demand for these products.
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