Color Driving Digital Growth

According to InfoTrends’ 2009-2014 U.S. Print on Demand Market Forecast, the production digital printing market will resume growth, but at a more moderate pace than it has in the recent past. This forecast contains a current state for 2010 and forecast for 2010-2014 in terms of production digital device placements, installed base, page volumes, revenue and retail value of print.

The economic recession has had a significant impact on the general printing industry and digital was not immune to this. The number of printing establishments in the U.S. declined, as well as overall value of shipments. Limited access to capital along with the negative economic pressures hurting print service providers contributed to a decline in investment in new equipment. In addition to decreased investment, the economic downturn has also impacted print volumes and retail value per page.

One key underlying assumption in our forecast is the decline of the printing industry that occurred from 2008 to 2009 (figure 1). InfoTrends’ research indicates that the printing industry declined by 11% in terms of value of shipments (including all print-for-pay as well as in-plant printers). We expect that the industry will continue to decline at a more moderate rate and eventually level off at around the 2012-2013 timeframe. A sluggish economic recovery, along with existing over capacity in the printing industry, are the primary contributors to this continued decline.

However, despite this continued decline, opportunity still remains in the market. Amidst a year of precipitous declines in the industry, digital color print volumes remained relatively stable. In an InfoTrends survey conducted in the first quarter of 2010, respondents reported that their average digital color print volume grew by 2.7% from 2008 to 2009. In addition, digital black-and-white volumes declined by -1.1% while offset print volumes declined by -4.3%. The same study revealed that digital color had the highest percentage of respondents reporting some level of growth, while offset volumes had the lowest percentage of respondents reporting growth (figure 2). The respondents of this survey represented both print-for-pay and in-plant printing environments.

InfoTrends projects that overall POD pages will actually decline by a -0.8% CAGR, with black-and-white pages declining by a -6% CAGR, and color pages growing by a 14% CAGR. InfoTrends’ previous forecast had these figures at -4% and 18%, respectively. Despite a smaller market and less than favorable economic conditions, production digital color pages are still expected to grow in the next five years. This growth can be attributed to a variety of factors, including the migration of pages from offset printing to digital printing, transfer of digital black-and-white pages to digital color pages and new applications.

Unit placements of production digital devices are expected to grow at a 1% CAGR. Once again, the growth will occur with color devices, while black-and-white will decline. All color duty cycles will grow except for the very light production category. This category comprises office devices that are used in production environments. Other categories such as mid-production color and very high speed, continuous feed color will experience double digit growth. Despite these healthy growth projections, overall digital production device unit placements declined by -17% from 2008 to 2009. Although our growth projections are positive, some categories may not recover to their pre-2008 levels.

The impact that color will have on the market continues to be profound. Color units were 72% of all unit placements in 2009 and will grow to 78% of total unit placements in 2014. In terms of total POD pages, color only represented less than 20% of all POD pages, but is expected to reach more than one third by 2014. It is even possible that the share of color pages will grow beyond this figure before 2014.

The digital color production equipment marketplace is becoming increasingly competitive. In segments where only one or a few players existed, there are now multiple vendors offering products. This high level of competition is driving vendors to further differentiate their products by increasing speed and duty cycles and adding new features such as the ability to print colors beyond CMYK, operator replaceable parts, and inline finishing capabilities. As the economy recovers, the printing industry will be undergoing its own recovery. The end result may be a smaller industry in terms of overall size, but ultimately one that is more automated, agile and capable of producing new applications.

To learn more about InfoTrends’ 2009-2014 Print On Demand Market Forecast, please contact Robyn Wuori at 781/616-2100 x103 or robyn_wuori@infotrends.com.

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