Martin Hingley's Blog

Peripherals Market Highlights Q3 2011

• 2010 Revenues were $168 billion – growth 6%
• A highly seasonal market with strong Q4 sales
• 49% of revenues derived from consumers in the last year
• HP leads the market, with Canon catching up
• Newer players Dell and Samsung have joined Hitachi and Ricoh as second tier players
• MPS proved recession proof, but revenues have fallen back in the recovery
• Growth will be low single-digit until 2014, followed by slight declines in 2015 and 2016
• The market is driven by digitisation of analogue processes
• The market is slowed by the falling relevance of permanent physical pint-outs

The Worldwide Peripherals Market Grew By 6% In 2010

At ITCandor we’ve been providing a few market development research papers over the last month or so, which we provide free to our readers as an introduction to our capabilities in sizing, discussing and forecasting specific markets. We last looked at the worldwide peripherals market a year or so ago and thought it would be a good chance to update you on what’s been happening.
We should say from the outset that we’ve increased our sizing of the overall market (which covers Ink Jet and Laser printers and other peripherals – but not traditional photocopiers if they have no network or PC attachments). The 2010 market was worth some $168 billion, growing 6% from the $157 billion in 2009. The rationale is that we’ve added a number of new vendors who had been included in the ‘other’ category in last year’s research. Despite our uplift for the overall market size, the trends in shipments and the deep effects of the downturn still show clearly in our findings. As usual we collect (but have not included) the proportion of revenues each vendor gets in OEM business from other suppliers. The peripherals market is quite ‘incestuous’ in this respect, with Canon still manufacturing all laser engines for HP: Samsung is also a major OEM player.
Each quarter we track the revenues, net profits and employee numbers of the following peripherals suppliers – Apple, Canon, Dell, Hitachi, HP, Konica Minolta, Lexmark, LG, NEC, Océ, Oki Data, Polycom, Ricoh, Samsung, Tandberg/Cisco, Telecom Italia, Toshiba and Xerox.

Asia Pacific Leads In Continental Spending On Peripherals

We took each supplier’s revenues and split them by country, before regrouping them at the continental and sub-continental level – in fact we do this for all of our statistics, although we don’t always publish at that level on this site. Our findings (shown in Figure 1) are that Asia Pacific leads in terms of spending on peripherals, followed by the Americas and Europe. BRIC countries (Brazil, Russia, India and China) are ‘double counted’ in this chart – they have not yet delivered on the promise of substantially greater growth opportunities for peripherals suppliers. The Middle East and Africa are both small regions for sales of these products.
The peripherals market – like all ITC hardware areas – was significantly affected by the credit crunch and downturn, which is shown in Figure 2. Following a strong recovery in Q4 2009 and Q1 2010 market growth has fallen back somewhat.
In terms of continental spending growth, Asia Pacific has led for some quarters, followed by the Americas, with Europe somewhat behind. To a certain extend the regional growth numbers are affected by exchange rate changes, which we track closely but are not publishing here. Contact us if you need more detail.

HP Leads The Worldwide Peripherals Market, But Canon Is Catching UP

Our market model now formally assesses the performance of some 20 peripherals suppliers, the largest of which we will discuss here.
HP and Canon are the largest, generating revenues of $26B and $25B respectively from the sales of peripherals in the year to the end of March 2011. Of the other major vendors, Hitachi and Ricoh are long term players whose market positioning has fallen, while Dell and Samsung are both relative new-comers improving market standing following significant investments at the beginning of the 200s. A view of long-term revenue development for these 6 vendors is shown in Figure 3.
Market shares for the peripherals market are shown in Figure 4 for the annual periods ending with Q1 2010 and Q1 2011 respectively. Market growth was just 6% (unlike the PC market’s 13%). HP gained share, but not as much as Canon: other vendors were squeezed.

Managed Print Services Proved Recession-Proof, But Growth Has Been Slow During The Recovery

Last year we reported that Managed Print Services (MPS) had been resistant to the recession in hardware sales hit hard by the credit crunch. A view of world revenues is shown in Figure 5. Despite becoming a countervailing market component, the growth of MPS during the last few quarters has been less, with only a 5% increase in Q1 2011 against the 10% growth in peripherals hardware revenues.
Our view is that the future market for MPS will continue to track the hardware market, not least because the effects of the earthquake in Japan is likely to dampen its success as an alternative to in-house printing for the next few quarters. The increase in digitisation is helping vendors take more money at the high-end – replacing large format analogue printing with computerised output, but the associated new purchasing appears to be equally balanced between the use of in-house equipment and service provision.
Revenues from the business market are skewed towards small companies (those with less than 100 employees), which accounted for 49% of spending in the year to the end of March 2011: in comparison medium (companies with between 100 and 1,000 employees) accounted for 19% and large companies 38% of the market. Spending on printing by large companies has held up more strongly than in comparative markets (servers and storage systems for instance), due to the specific relevance of digitisation for high-end print output here.

Peripherals Spending Will Grow Reasonably And Retain A Strong Q4 Seasonality

As part of our research we forecast many different ITC offerings. Our predictions for future values of the Peripherals hardware market are shown in Table 1 (annual) and Figure 6 (annual and quarterly). Please contact us if you need more detail at a country or quarterly level.
Table 1 – World Peripherals Market Forecast (Revenues $US Billion)

Source: ITCandor, July 2011
We believe that annual growth in this market will be at the single-digit level for the future period between 2011 and 2014, with values declining slightly between 2015 and 2016, While the market for peripherals is increased by the process of digitisation, the propensity of users not to print images and documents will restrict growth in this mature market area.

Consumer Spending On Peripherals Out-Strips Business

Like the PC, the peripherals market is heavily dependent on consumer spending, which helps up more strongly during the recession. In the year to the end of March 2011 one third ($56 billion) of the Peripherals revenues were from consumers – see Figure 7 for a view of quarterly revenues by consumer and business size sectors.
There are a number of service offerings for consumers which provide external services for printing photos and documents (Snapfish, owned by HP for example). There is a strong potential business for suppliers to track the shifting balance in user devices from PC to Smart Phone and Tablet over coming years to the extent that users will want to have physical printouts of images capture through social media applications. If they fail to do so, or if users of alternative client devices prove less interested in permanent images, the Peripherals market is like to suffer steeper declines than the ones we’re currently predicting.

Some Conclusions – We Will Build More Printer And Other Peripheral Detail Into ITCandor Coverage

We continue to focus on the Peripherals market as one of the key elements of the ITC market. As you can see we’ve segmented the market by country, supplier and user purchasing type. We’re also building more detail – adding units and Peripheral type to the mix, in order to help our customers use our data and forecasts within their business planning activities.
If you are a Peripherals supplier with an interest in our support for your processes, please contact us for more information.

Filed under: Cloud Computing, Managed Print Services, Peripheral Tagged: | Apple, Canon, Dell, Digitisation, Hitachi, HP, inkjet printeres, Konica Minolta, laser printers, Lexmark, LG, MPS, NEC, Océ, Oki Data, Peripherals, Polycom, Ricoh, Samsung, Tandberg/Cisco, Telecom Italia, Toshiba, Xerox