HP, Monochrome Remain on Top in Cartridge Production Survey
It’s a return to basics in this year’s cartridge production survey, with monochrome color production once again making up more than three-quarters of the average production levels after dropping to 66 percent in 2008. Whether this is a reflection of the economy, the current empties stream, or simply the makeup of respondents in this year’s survey remains to be seen; most likely it is a combination of factors.
The cartridge production survey was last offered at World Expo 2008, which means the U.S. economy was just beginning its plummet into the Great Recession. Additionally, because the survey represented here was offered online between late 2010 and early 2011, the makeup of respondents this year is more international than in previous years, with a 50/50 mix of U.S.- and non-U.S.-based respondents. This is a significant difference from a cut of both the 2008 and 2007 surveys, both offered at World Expo and both reflecting that show’s typical mix, with roughly a 65/35 mix of U.S. and non-U.S. respondents.
One very interesting statistic that may be a result of this shift is the business model most respondents identify themselves as. Eighty-two percent of respondents report that they are remanufacturers, compared to 45 percent in 2008. Tied for second place was printer repair and cartridge reseller, each at 41 percent. In 2008, 64 percent of respondents were resellers. Again, it is likely the more international makeup of respondents accounts for this shift. And 36 percent of respondents report that they do empties collection, which may account for some of the numbers we’ll see later in this survey.
1) What percentage of your cartridges produced in-house are toner, inkjet and MICR?
Toner cartridges remain the bulk of respondents’ business, accounting for 75 percent of the production run. This is up from 67 percent in 2008 and 59 percent in 2007. Not surprisingly, then, inkjet numbers declined, making up 22 percent of production, down from 28 percent in 2008 and 37 percent in 2007. MICR numbers remain small — 3 percent this year, down from 5 percent in 2008 and 4 percent in 2007. See Figure 1.
Overall, survey takers remain dedicated to toner production. Eighty-eight percent say they produce at least some toner cartridges (including MICR) in-house; the 2008 number was 90 percent, so that area, at least, remains stable. Inkjet again took a bit of a drop in popularity, with just under half (49 percent) of respondents producing any inkjet cartridges at all in-house, down from 56 percent in the previous survey.
While not everyone who took the survey produces cartridges in-house, the percentages were greater than in previous years. Eighty percent of respondents said they did at least some cartridge production in-house, with only 20 percent doing none at all; compare this to the 60/40 ratio in 2008. The 20 percent who said they don’t produce any cartridges in-house are of course not reflected in the production numbers in this article.
2) What percentage of your toner cartridges produced in-house are monochrome, color and MICR? How many of each type of toner cartridge do you produce on average each month?
Color took a significant dip this year as monochrome cartridge production very nearly returned to 2007 levels. Monochrome production, which peaked at 95 percent in 2004, slowly declined over the years to 79 percent in 2007 and then to 66 percent in 2009; this year, it is back up to 76 percent. Meanwhile, color, which jumped from 16 percent in 2007 to 30 percent in 2008, is back down to 20 percent. MICR remained steady at 4 percent. See Figure 2.
It is important to note, however, that the 2008 numbers clearly reflected some very large producers taking the survey. The average monochrome production run in 2008 was more than 46,000 cartridges, while color was more than 44,000; this year, the numbers were approximately 2,500 and 1,000, respectively. These numbers are more in line with previous years’ numbers, so it is probably a bit more accurate to look at the mean production numbers. The mean number of monochrome cartridges produced this year was 332; in both 2008 and 2007, it was 400, so the numbers are a bit steadier. The mean number of color cartridges this year was 100; in 2008, it was 200, and in 2007, it was 50. This gives us a more likely explanation for the 2008 jump in color numbers: These much larger companies likely have more advanced resources for color cartridge production. In fact, two respondents in 2008 reported production runs of 2 million cartridges per month — numbers not repeated in this year’s survey.
3) What percentage of your inkjets produced in-house are black and color?
The numbers over the years become a bit more consistent as we move into these questions. The black-to-color ratio has remained fairly steady, with an average production run of 65 percent black and 35 percent color this year, 62 and 38 percent in 2008, and 64 percent and 36 percent in 2007. See Figure 3.
Total production numbers, as with toner cartridges, have shifted wildly over the last few years, and while again the 2008 numbers were skewed by a few large producers, the mean numbers still show significant fluctuation. The median number of monochrome inkjet cartridges this year was 300; in 2008, it was 750, and in 2007, it was 500. Meanwhile, color numbers range from 150 this year to 400 in 2008 and 50 in 2007. Ignoring the 2008 numbers for a moment, one can see a definite shift toward color between 2007 and now.
4) How have your in-house production volumes changed compared to two years ago?
Not surprisingly, based on the previously reported numbers, respondents are reporting higher in-house production numbers. Fifty-five percent of respondents say they are producing more cartridges than they were two years ago; this is up slightly from 2008’s 50 percent, although down from 65 percent in 2007 and 70 percent in 2006. Only 10 percent say they are producing fewer cartridges — drastically down from 20 percent in 2008 and 14 percent in 2007. See Figure 4.
Interestingly, the rebound from 2008 is reflected primarily in toner production. Forty-five percent of respondents say they are producing more toner cartridges than two years ago, and only 10 percent say they are producing fewer. The timing on this is important to keep in mind; we are asking about mid-2008 production levels, and mid-2008 is also the timing of the previous survey. And, of course, mid-2008 was a time of some of the greatest economic uncertainty in recent history, so both projections and actual numbers likely reflect that turmoil.
Inkjet numbers, however, are different. Only 17 percent of respondents say they are producing more inkjets than two years ago, down from 18 percent in 2008 and 21 percent in 2007. Meanwhile, 10 percent say they are producing fewer inkjets; this is the first time the number has been in the double digits, and it made a huge jump from 2007’s 3 percent as well as 2008’s 6 percent.
5) For how many cartridge types do you currently produce cartridges?
The variety of cartridges produced is fairly evenly divided, with a relatively even percentage of respondents reporting ranges from less than 10 to between 51 and 100. Only the “more than 100” category had a low percentage of respondents, with 10 percent reporting they produce more than 100 types of cartridges. This is typical, however; in 2008 (the year with the large producers responding), the percentage was 15, while in 2007, it was just 5.5 percent.
Otherwise, the breakdown is as follows: Less than 10, 21 percent (also 21 percent in 2008 and 12.5 percent in 2007); 11 to 25, 28 percent (21 percent in 2008 and 32 percent in 2007); 26 to 50, 17 percent (25 percent in 2009 and 36 percent in 2007); and 51 to 100, 24 percent (18 percent in 2008 and 14 percent in 2007). See Figure 5.
In general, it seems more people are producing more cartridge types; it was the middle ground of 26 to 50 cartridge types that showed a drop, while 51 to 100 showed a gain over the past two surveys. The 11 to 25 range increased over 2008; however, it dropped a bit from 2007, and again, it is likely that the large producers in the 2008 survey skewed those results a bit.
6) Do you produce color cartridges in-house? If so, how has your in-house production of color cartridges changed in the past two years?
Asking more directly about color cartridge production, we find that 83 percent of those who produce cartridges in-house produce at least some color cartridges — up pretty significantly from 2008’s 74 percent, though down from 88 percent in 2007. Of those producers, however, only 59 percent report increasing their color cartridge production over the past two years, compared to 63 percent in 2008. See Figure 6. On the other hand, 19 percent decreased production, down from only 10 percent in 2008. Fifteen percent stayed steady, up from 10 percent in 2008. This meshes a little better with the overall percentages we saw earlier, in which the total percentage of color cartridges produced in-house dropped from 30 percent in 2008 to 20 percent this year.
7) What percentage of your inkjet volume is from each OEM?
Not surprisingly, HP still reigns supreme on the inkjet side — in fact, more than ever, with 71 percent of inkjet volume reported as being from HP cartridges, up from 55 percent in 2008 and 65 percent in 2007. Moving into second place was Canon with 12 percent, up from 8 percent in both 2008 and 2007. Epson — not surprisingly, given the legal landscape — dropped significantly to 3 percent from 12 percent in 2008 and 10 percent in 2007. Other OEMs — each with a small share — included Lexmark with 6 percent (7 percent in 2008 and 11 percent in 2007), Brother with 3 percent (4 percent in 2008 and 2 percent in 2007) and Dell with 2 percent (10 percent in 2008 and 2 percent in 2007). “Other” cartridges came in at 3 percent, although no specific types were listed. See Figure 7.
8) What percentage of your toner volume is from each OEM?
As usual, HP is king on the toner side as well, with 59 percent of toner cartridge volume, up slightly from 55 percent in 2008, though down from 66 percent in 2007 and 70 percent in 2006. The next most popular brand was Brother with 10 percent, doubling 2008’s 5 percent and up from 4 percent in 2007. Samsung took third place with 9 percent, up from 5 percent in 2008 and just 1 percent in 2007. Rounding out the toner OEMs were Xerox with 7 percent (6 percent in 2008 and 2 percent in 2007), Canon with 6 percent (5 percent in 2008 and 7 percent in 2007), Lexmark with 4 percent (7 percent in both 2008 and 2007) and Dell, also with 4 percent (5 percent in 2008 and 6 percent in 2007). “Other” came in at only 1 percent and included responses such as Konica, Kyocera, IBM, Pitney, Ricoh and Sharp. See Figure 8.
9) What is your largest-volume toner cartridge, and for which OEM have you seen an increase in demand?
HP is the leader when it comes to production volumes, but which cartridge in particular are remanufacturers clamoring for? The 12A (1010/1012/1020) blew away all others in responses, knocking last year’s winner, the 38A/39A (4200/4300), out of the top spot. The 1012 had the top spot in 2007 as well, so this perennial favorite is hanging on to its popularity. In third place was the 42A/42X (4250/4350), which was in second place last year and the year before. The 2600, which was in the top five last year, only had a couple of mentions, which is in line with what we’ve seen with respect to color volumes. Cartridges for which there was an increased demand include a variety of HP, Xerox, Lexmark and Brother cartridges, and considering an answer that is perhaps most indicative of the current market, “Any new equipment introduced by HP where there is an insufficient number of empties to facilitate remanufacturing” are also included.
10) What is your largest-volume inkjet cartridge, and for which OEM have you seen an increase in demand?
The top cartridges on the inkjet side haven’t changed much since 2008. Once again, the HP 56 tops the list, with the HP 21 in second place. The HP 60 series received a few mentions as well, and there was at least one mention of most HP cartridges.
While cartridge production has obviously felt the impact of a tumultuous economy and an empties market dealing with supply-chain shortages, the remanufacturing market continues to persevere.
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This article originally appeared in the May 2011 issue of Recharger.