SECTOR GUIDE ? Inkjet/MFD Printers

The last 12 months have been a bit of a rollercoaster ride for the printer industry. Not only have single function sales been marginalised in favour of those of multifunctional devices, but there has also been huge changes in the way people use their computers, which inevitably has an impact on the type of printers customers buy.

But has this seismic shift in sales affected the market’s sales potential? "The inkjet market has been consistently strong throughout 2007, in both single function and multifunctional device markets," says XMA’s hardware sales specialist, Paul Kirk. "However, towards the back end of 2007, inkjet multifunctional sales have seen a substantial increase and single functional device sales have started to stagnate."

VIP’s product manager, Phil Brown disagrees: "There has been very little growth in the consumer inkjet printer market in recent times."

This could become a cause for concern for the retailers as the end of the year is traditionally when printer sales are strongest. "In terms of market seasonality, there is no question which is the key period for the consumer printing market. While the September/October back-to-school and university-period provides the market with a much needed boost following the relative stability seen in the first half of the year, it is in December when we really see a surge in sales," says GfK’s Neil Frackiewicz.

The change in market share between single function printers and MFDs has been nothing short of drastic, with its share of the market decreasing from 52 per cent in December 2006, to just 35 per cent in September 2007. In contrast, by September 2007, the market share of MFDs had risen to 65 per cent.

"In contrast to the multi-functional sector, and as a direct impact of their success, sales of A4 single function printers have seen double-digit volume and value declines throughout the year, with overall year-to-date 2007 sales declining by 21 per cent compared with 2006," adds Frackiewick. The decline is likely to be similar during 2007, with MFDs continuing to increase their share of the market at the expense of A4 single function printers.

Brown suggests that the reason for this could be changing consumer tastes: "Sales of multifunctional devices and laser printers have grown in popularity with home users due to falling average prices and the introduction of higher performance products."

The biggest shift, however, was in small photo-printers segment, with their market share dropping from a high of 33 per cent in December 2006, to just five per cent in September 2007. Indeed, even specialist photo-MFDs, which had enjoyed stable growth during the same period, began seeing a decline in their share, falling to just 38 per cent of the market, down from their high of 47 per cent in July.

Part of this change in market share has been put down to the shift in price structure within the sector. Brown blamed the fall of specialist photo printers on the High Street and internet: "Sales of photo inkjet printers have suffered at the hands of high-street and internet photo printing services, which are now cheaper and easier to use than ever before."

As prices have come down, more advanced printers have become affordable, and have caused a shift in purchasing habits. "There’s a clear benefit to most consumers of having a single, low-cost device on a desk rather than three or four taking up lots of space," says Brown. "Now that the average price of these products have fallen to affordable levels, more and more consumers are choosing MFDs over inkjets, which were the previous low cost option of choice."

Kirk echoed the point: "Price points are continuing to fall as manufacturers battle for market share, which in turn will benefit end users. For example, Canon offered in December a good quality A4 inkjet multifunctional printer for around £45. There was also a £20 cash back offer with it, reducing the actual cost of the printer to just £25. This was less than any single function device, in the Canon range."

However, it wasn’t just cost that was driving the change in demand according to Kirk: "The trend throughout the year from manufacturers was to reduce the number of single function printers and increase the number of multifunctional devices to meet the consumer’s functional demands."

"Many manufacturers have reduced their single function offering considerably and the models within the range have often been in constraint. For the majority of end users, multifunction printers will be the product of choice in 2008 and will outsell single function devices."

But where is the marketed headed? Kirk believes the days of single function printers are numbered: "The multifunctional devices will no doubt all but replace single function offerings in the years ahead. Already, MFDs are providing features such as memory card slots, LCD screens for direct printing, CD/DVD printable tray: all of which would previously only feature on a single function device.

We will also see more devices that are targeted towards the home office user that can mix both functional features such as fax, ADF and duplex printing, with more consumer requirements such as a photo printing and CD/DVD printing.