HP Inc. buys Samsung’s printer business for $1.05b

While HP Enterprise has been disposing of its EDS and most of its software business HP Inc. has decided to spend $1.05b to acquire Samsung’s laser printer business. HP is already the world leading supplier (see Figure for laser printer market shares for the year to the end of June). Adding Samsung’s business would have added 5%, giving it an 18.8% share.

The laser printer business is more incestuous than most IT product areas; for 30 years HP has had an OEM deal in place to use Canon engines in its products, despite the fact that these 2 companies vie for leadership of the overall $161b peripherals market (Canon currently leads – see Figure).

HP intends to use Samsung’s technology to attack the copier market, which it thinks is ripe for replacement with MFPs. Buying Samsung’s business includes 6.5k patents, 1,300 engineers and researchers and a potential threat to its relationship with Canon. Evidence of HP’s care not to interrupt things can be read in the quotation in the press release from Fujio Mitarai, Canon’s chairman and CEO about the value of its relationship with HP in the MFP area.

Samsung is becoming less of a full-range supplier as a result of HP’s move – before it sold its hard disk business to Seagate in 2011 it made virtually all the components in the PCs, printers and smart phones it sold to its customers.

It’s hardly surprising that consolidation is visiting the printer industry, since it continues to decline. HP is one of a number of suppliers addressing the need for 3D printing in manufacturing, while Oculus Rift and others expand the type of wearable avaialable; but these are not enough to make the overall market grow. The improvement in computer displays has reduced the number of pages we print out in order to read documents fully and digital transformation is decimating the number of paper-based everyday processes across the board from Banking to Government. The potential advantages for the consolidating vendor are larger sales, better economies of scale and higher margins, which won’t reverse the market decline, but should enable HP to make more profit. The Figure shows quarterly spending by type in the peripherals market.