An Overview of the Wide-Format Printing Market From Lyra Research's Peter Mayhew
Peter Mayhew, senior analyst for Lyra Research’s Wide-Format Printing Advisory Service (WFS), recently answered some questions for Recharger Magazine regarding the wide-format printing market. Mayhew has more than 30 years of sales and marketing experience in the photographic and digital imaging segments of the graphic-arts industry, with specialty experience in wide-format and desktop hardware, supplies and software. Before joining Lyra, Mayhew was the head of commercial marketing for the worldwide digital imaging group at Ilford Imaging in the United Kingdom. He also worked as a marketing director for Ilford Imaging in the United States, where he played a key role in starting up the digital imaging business for this company. He has also established a photographic laboratory, an industrial photographic studio and an exhibition display business.
Mayhew answered the following questions for Recharger:
1) Which market segments in the wide-format industry have the best long-term prospects?
Among the wide-format market segments that exhibit growth potential through 2013 are the UV-curable market and the wide-format CAD market.
The recession has battered many of the wide-format segments of the market, including the UV-curable hardware and supplies segments. The economy’s impact on the advertising and signage markets, the scarcity of outside financing for print service providers (PSPs) to acquire new commercial printers, and the lack of requirements for increased production capacity among PSPs caused sales to plunge in 2009. Despite these setbacks, printer sales for this segment are expected to climb in the long run. Because UV-curable technology offers enhanced durability and because it is believed to be more environmentally friendly than other types of wide-format technology, long-term prospects remain bright for most manufacturers in this market.
2) What does Lyra forecast for this market segment?
Lyra forecasts that vendors will continue to ship UV-curable printers at a rapid pace over the next few years. In 2013, a total of nearly 4,000 UV-curable printers will be shipped worldwide, achieving a compound annual growth rate (CAGR) of 10 percent between 2008 and 2013 (see Figure 1).
3) How has the recession affected the market for wide-format CAD?
The economic recession, particularly the global downturn in construction, has destabilized the CAD printer industry. The recession affected the architectural, engineering and construction (AEC) industry earlier and more severely than other markets. Lyra estimates that the AEC segment accounts for almost 70 percent of total CAD sales, which has made hardware vendors, particularly Xerox and KIP, vulnerable to the extreme downturn in the construction industry. In fact, we have just seen Xerox announce their exit from the U.S. and Canadian wide-format markets during 2011. Other factors influencing the CAD market include the lengthening of the printer life cycle (because companies are not replacing their hardware as frequently) and the increasing importance of Web- and cloud-based applications in the AEC sector.
There will be growth from 2008 to 2013 in the worldwide wide-format inkjet CAD hardware market, although it will be small (see Figure 2). About 117,000 units were shipped in 2008, and approximately 121,000 units will ship in 2013. Hundreds of reprographers have gone out of business during the recession, which will hinder growth in this market through 2013.
4) How will eco-solvent hardware and ink fare in the near future?
Eco-solvent ink revenue declined from 2008 to 2009 and will recover through 2011, peaking at $327 million (see Figure 3). During this period, growth in the installed base is expected to slow. More importantly, ink pricing will continue to decline even when sustained economic growth returns.
The proliferation of inexpensive third-party inks will contribute significantly to the decline in total solvent ink revenue. It will also contribute to the decline of OEM share in this market. It is important to note that the decrease in revenue will occur more rapidly than the decrease in the solvent hardware installed base. Overall, worldwide solvent ink revenue will decline at a CAGR of –3 percent between 2008 and 2013. Lyra includes HP’s new latex ink technology in this segment of the market and there can be no doubt that this disruptive technology is starting to have an impact.
5) What is the outlook for the wide-format aqueous graphics market?
Lyra groups the wide-format aqueous graphics market into two hardware segments: 24- to 44-inches and 44-plus inches. The installed base, which Lyra estimates consisted of about 520,000 units in 2008, is expected to shrink to 468,000 printers in 2013 (see Figure 4). This indicates that hardware retirements are occurring at a faster rate than hardware installations. End users will continue to consolidate production by using fewer aqueous devices and transferring work to solvent, UV-curable and latex printers.
6) What else does Lyra know about wide-format aqueous ink consumption?
Lyra conducted a wide-format inkjet user survey in 2009 that provided us with insight into the aqueous market. More than 500 users participated in the survey, and more than half of them said they use wide-format technology exclusively for print-for-pay applications, while the rest of the respondents use wide-format printers to complete some type of print-for-use job.
The survey found that 80 percent of the ink that respondents consume is pigment-based rather than dye-based. More than 80 percent of the ink that artists and/or art reproducers and photography professionals consume is pigment-based, while 65 to 80 percent of the ink that full-service PSPs and sign shops use is pigment-based ink (see Figure 5).
7) Does Lyra have any data regarding the use of third-party inks in the wide-format market?
Yes. In that same 2009 wide-format inkjet user survey, we asked respondents about their use of third-party inks. About 12 percent of the respondents had used a third-party aqueous wide-format ink cartridge in the 12 months prior to their participation in the survey, and another 17 percent considered purchasing aftermarket ink. Full-service PSPs and sign shops are most likely to purchase or consider purchasing third-party inks.
The most common reason that users cited for not considering aftermarket wide-format cartridges is concern regarding ink quality or consistency (64 percent of respondents). Another 19 percent of respondents said they worry that third-party inks could possibly damage print heads. Eleven percent of survey respondents said they don’t want to risk voiding a hardware warranty by using aftermarket inks.
About Lyra’s wide-format offerings
Lyra offers many reports that cover the wide-format market and a full advisory service that includes a comprehensive forecast for all segments of the wide-format hardware and supplies markets.
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This article originally appeared in the April 2011 issue of Recharger.