The printer market entered yet another phase of decline as the result of the COVID-19 pandemic. In 2020 customers spent $33 billion (down 10%) on 143 million printers (down 11%), while the total installed base dropped 4% to 577 million. While there has been a slow rise in 3D printing machine sales, they service very different sectors than traditional printing. The major suppliers are all publishing much better results for Q2 due to the ‘easy compare’ with last year, but I can see nothing in the near future which will reverse the downward trend in this market.
Printer hardware made up only 14.3% of the total peripherals market – worth $248m – in the last year (see my Figure above). Supplies (ink jet and laser toner cartridges, photographic paper, etc.) were 21.9%, peripheral service (production print, maintenance, etc.) took 48.8%, while cameras (still, motion, web cams) and other hardware (mice, pointers, gaming controllers, keyboards, etc.) accounted for 6.9% and 8.2% respectively.
I show the shares that the major manufacturers had of the 140m printer shipments globally over the last year in my Figure above. HP Inc. was the strongest, followed closely by Canon, with the ‘usual suspects’ of Brother, Epson, Kyocera, NEC and Ricoh taking smaller shares. It looks unlikely that 3D printing will be the saviour of the peripherals market, given the lack of positive results from the early inroads printer suppliers have made. For instance:
- HP Inc. – 3D printing is part of its Commercial Hardware business. It hasn’t split out how much revenue it makes from its machines, despite naming this area as ‘disruptive’. It boasts of printing 4 million personal protective equipment (PPE) parts for hospitals since the star of the COVID-19 pandemic.
- Canon – concentrates on ceramic materials (supplies) for 3D printing, but doesn’t mention the revenues made or even if they provides machines to use them in.
- Kyocera – sells 3 MakerBot 3D models and makes ceramic materials for use in them.
- Brother – manufactures the self-assembly AuthorBot 3D printer for enthusiasts/ education markets.
- Epson – has a strategy for high-end industrial 3D printing, but hasn’t updated it since 2017.
- Ricoh – has no 3D printers for sale, but is working on 3D Bioprinter for healthcare.
- NEC – no evidence of 3D printing in its strategy or product line.
In reality the successful suppliers in this market are targeting users of Operational Technology (OT) rather than Information Technology (IT), building out from existing industrial machine (CNC and other) product lines. It is unlikely that we will see a mass market for 3D printing in the office or home in the near future.
There is still good business to be made in a falling market (as Unisys did from cheque clearing by providing outsourcing to the banks that wanted to stop their in-house processes). Printer suppliers will continue to make profits from supplies (as long as they can prevent – or at least make it extremely difficult – for third parties to sell compatible cartridges), selling document/print services and working with specialist OT equipment suppliers to take what they can from the 3D printing market. It is unlikely that there will be much vendor consolidation either. Companies like Dell and Telecom Italia/Olivetti attempted to create printer businesses 20 years ago, but failed to build installed bases big enough to create a sustainable market for toner cartridges, supplies and services. The barriers to entry for them are safeguards against exit for the major suppliers today.