Printer Unit Market Falls on Weak Demand, Tightened Inventory

By Jessica Davis  |  Print this article Print

A weak market and tighter inventory controls drove down unit sales of printers, copiers and multifunction printers (MFPs) in the first half of 2009. HP was hit harder than other vendors, losing 3.4 percent of market share from the same period a year ago.

Weak demand, tighter inventory controls and shortages of low-end products all contributed to a 20 percent decline for the printer, copier and multifunction printer market for the first half of 2009.

That’s according to a new report from Gartner that found that unit shipments totaled 51.3 million in the first half of 2009. The report also indicated that Hewlett-Packard lost market share as most other vendors gained.

"The market witnessed a weak demand as both businesses and consumers reduced spending, and the drop in shipments was also impacted by tighter inventory controls in order to minimize inventory levels in the channels," says Lai-Ling Lam, senior research analyst at Gartner, in a prepared statement. "The situation was further exacerbated by the shortages of popular low-end inkjets and page printers to home, small businesses, and small and medium businesses."

Office printers were the hardest hit, with a 24.5 percent drop in shipments in the first half of 2009, and some businesses may be re-evaluating their use of printers altogether, a trend that has the potential to change the market forever.

"In this tough economic environment, businesses are delaying or eliminating purchases of new equipments altogether," says Lam. "The global downturn has also forced them to review their printing needs, which could change their print consumptions in the long term. At the same time, it also makes print vendors increasingly look at alternative hardware strategies such as managed print service [MPS] and smart MFP adoption as ways to increase revenue."

The consumer market performed slightly better than the office market, with consumer inkjet product shipments falling by 17.3 percent in the first half of 2009.

HP lost market share in the first half of 2009, falling from 43.4 percent to 40 percent. Gartner attributed the loss to the HP’s tighter control over its channel inventory levels amidst weakening demand.

"HP’s loss was Canon’s gain, which had stable performance in Americas and Asia/Pacific, helping it to increase its market share to 19 percent in the first half of 2009," Lam says. While HP lost share, it still led the pack with its 40 percent market share, followed by Canon with 19 percent market share, up from 16.8 percent in the first half of last year.  Epson was third with 14.2 percent market share, up from 13.7 percent in the first half of 2008. Samsung Electronics came in fourth with 4.9 percent market share, compared with 4.4 percent in the first half of last year. All other vendors made up 15.6 percent market share, compared with 16.2 percent in the first half of 2008.

Despite some positive indicators from distributors and vendors recently, Gartner doesn’t see a great recovery ahead for the print market in 2009.

"A best-case scenario will see some improvement in demand, loosening in inventory control and fulfillment of back orders, which would uplift the market, ending the year with a single-digit decline. However, we do not expect the market to recover before 2010," Lam says.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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