The peripheral (inclusive of printer) market has survived a period of significant decline to deliver growth in Q2 2018. Sales rose by 4.4% to $74b and units by 5.9% to 109m, although there was a 1.4% decline in the installed base. For the year to the end of June 2018 market revenues grew by 5.8% to $256b and units by 4.7% to 420m.My Figure shows the development of market revenues by type. Peripheral service (mainly document and print services/outsourcing) is by far the largest offering, followed by supplies (print cartridges, ink, photographic paper, etc.), printers and camera/other peripheral hardware. This market is possibly the only one in which the decline in business in 2015-6 was actually deeper than in the Credit Crunch in 2008-9. It’s got a long way to go before it makes up for the 22% annual decline against the peak of spending in 2008 however.
This is one of only a few markets in which services and supplies can be measured along side the hardware areas. In total they accounted for 60.9% of total spending in the last year. Of the hardware areas laser printers were the strongest revenue generator, followed by digital cameras (a market which would be far larger if cameras were not included in most of the 1.4b shipments of mobile devices in the year), inkjet printers and other peripheral devices, which include audio visual, mice, gaming controllers, virtual reality headsets, pointers and computer keyboards, where Logitech is the market leader.
Asia Pacific is (as always) by far the strongest region for the acquisition of peripherals, accounting for 43% of global spending (see my Figure above). One important reason is a continuing need for many computer users to print out important documents in languages incorporating complex characters.
From a vendor point of view Canon has emerged over the last few years as the leading vendor, overtaking HP Inc.; in the last year its market share was 8.3% stronger. Of all the areas I track of the ITC market this is the one in which Japanese suppliers are most important, taking six of the top seven places. Unless through acquisition, this is unlikely to change rapidly, given the long time spans needed to design, patent and ship enough product to be able to generate strong revenues from after market sales of supplies and services.
The printer market requires large research and development expenditure by vendors to create proprietary products which generate more profit and revenue from supplies than they do from the hardware products themselves. The barrier to entry for new suppliers are bigger than in many other areas of the ITC market as a result.
The printer market has dual leaders – it is very difficult to say whether HP Inc. or Canon were top in the year (see my Figure above); they tied at 20.0% each in revenue, while Canon shipped slightly more printers and has a greater lead in terms of the installed base.
Market growth over the last few quarters has lessened the urgency to diversify for a while, but solid 3D printing and other newer types of product need to be successful for the total market to grow in the medium term, which is just as well given the long time periods and high investments needed to establish viable product ranges.