Color Laser Devices Are Page Growth Drivers And Drive More Pages Than Their MIF Share

Source: IDC

Color remains one of the bright spots for the print industry.  Color device unit shipments and color pages are up helping mitigate some of the negative trends in mono device shipments and pages. We discuss the opportunities and what we see as the drivers.


First, we will take a look at Color units from two perspectives: one – unit shipments and second – installed base perspective. Both are necessary to understand industry dynamics. Installed base reflects the active machines in field which are subject to a replacement cycle, at which time they can be potentially replaced by alternative technologies (e.g. mono to color, printer to MFP, small workgroup to larger workgroup).


Let us delve into installed base metrics. On a worldwide level, IDC data finds there are 430 million devices generating around 3 Trillion pages. 430 million devices constitutes the installed base of printer and multifunction peripherals (MFPs), incorporating both inkjet and laser technologies. Inkjet, which is practically comprised of all color, is the majority (99%) of the installed base but only constitutes around 10% of worldwide pages. Roughly 70% of worldwide pages come from mono laser devices. Mono laser devices include both single-function printers and MFPs. The remarkable story is color laser devices generate roughly 20% of the pages despite representing only 6% of the installed base. A key component of the print industry growth story revolves around color laser devices.


Color laser devices generate a combination of mono and color pages. IDC data shows that for a 3 year period, worldwide color laser pages grew at a compound annual growth rate (CAGR) of 7.3%, while their installed base grew at a 5.6% CAGR. Color laser devices are generating more positive page volume growth than mono laser devices. Worldwide mono laser device pages declined at a 2.4% CAGR, while their installed base registered a positive 3.0% CAGR. The color growth is even more impressive when viewed from an MFP perspective. Color laser MFP page growth registered a 12.2% CAGR while their installed base registered a 16.5% CAGR.


When we view the color laser device opportunity from a unit shipment growth perspective – worldwide color laser units generated a 3.1% CAGR over a 3 year period. The CAGR was muted due to a small dampening in demand during 2012 compared to 2011, when customers shifted briefly to replacing mono devices as the economy recovered. 2013 resumed sold growth for worldwide color unit shipments, registering a 5.3% growth. Color laser MFP generated an 11.9% CAGR during the same 3 year period, offsetting some softness in color laser single-function printer demand, and helped overall color laser units generate a positive growth story, as users migrated from single-function printers to multifunction peripherals (MFPs).


For the period 2013-2017, IDC estimates the color laser MFP unit market growth at a CAGR of 11.5%, while value of shipments is expected to grow at a CAGR of 2%. From a regional perspective, US color laser MFPs units are expected to grow at a 7% 2013-17 CAGR while Western Europe color laser MFP unit shipments are forecast to grow 17% during the same period. The growth in color laser MFP units is in contrast to the fortune of color inkjet MFP units. Worldwide inkjet MFP shipments are expected to grow at a 2013-17 CAGR of 1%. US inkjet MFP unit shipments are expected to decline 2% for the same period while the Western Europe market is likely to grow at a 1% CAGR. The preference for color devices has gained momentum in the past several as the product has evolved. The sub-$1,000 color laser MFP market has seen significant growth in terms of both the breadth of product offerings and actual shipments.


Next we explore the installed base growth by speed segments up to segment 4 (most common in offices) for the period 2013-2017.  Segment 1 refers to output speeds of 1-10 page per minute, Segment 2 refers to output speeds of 11-20 pages per minute, Segment 3 refers to output speeds of 21-30 pages per minute and Segment 4 refers to output speeds of 31-45 pages per minute for printed pages by color laser devices.


IDC sees growth across many speed segments (seg1, seg2, seg3, seg4) for color MFPs. This result in an effective color MFP installed base CAGR of 12.2%.  However, the page story has a twist. For color laser MFP only seg2, seg3 and seg4 register growth in pages across the same period leading to a overall color laser MFP page CAGR of 6.1% during the period 2013-2017. This is attributed to speed creep with users moving up in speed, and some lower speed segment devices in developing countries not exceeding baseline page volume due to limited usage.


Color single-function printers have a marginally positive installed base story combined with a negative page story with respective CAGRs of 0.1% and -1.9% during the same period 2013-2017. Color printer seg1 is the most impacted with a negative -9.8% installed base CAGR and negative -12.0% page CAGR. Seg2 and Seg4 have a positive installed base and page growth story during the same period. Seg3 has a negative headwind in terms of both installed base and pages due to speed creep to seg4.


What is driving the color laser device and page opportunity? IDC believes it is a combination of technology, vendor/channel push and customer demand that is driving color demand.  Technology such as pull printing and print management software allow customers to feel more comfortable that the cost of color printing is within their control and employees can be monitored to ensure they do not print personal documents.  In addition, through MPS, vendors and channel partners can offer color devices within a comprehensive MPS contract covering the customer's entire environment where the total cost is lower than prior to having the MPS contract. Customers have long wanted color but have feared both the upfront and on-going cost, for which there are now solutions. Affordable color devices for both corporate users and consumers are fuelling the demand for color. Outside MPS, vendors like HP with Instant Ink for its' select consumer inkjets and Lexmark with My Pages for its' select SMB laser devices are providing an alternative business model and payment method, subscription-based ink and toner, making color more affordable for customers with certain profiles.


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