Is the Market for Personal Printers Dying?
Printing out a document or a photo on a personal printer consumes expensive ink, and only the person you give it to can see it. Posting the same material online costs nothing, and countless people can see it.
The result? Fewer people are purchasing and using personal printers -- and printer vendors are feeling the heat.
From 2010 to 2011, North American sales of consumer-level multifunction inkjets dropped 12%, according to Larry Jamieson, analyst at the Photizo Group, a market research firm in Newton, Mass. Total sales fell from 13.1 million to 11.56 million units. Additionally, the number of pages printed in the home has declined 15% since 2009, he adds. "The reason we printed photos in the old days was that it was the only way to see them," says Jamieson. "Now, viewing them on our phones is fine in most cases."
North American sales of consumer-level multifunction inkjets and single-function printers are expected to continue dropping over the next few years, according to the Photizo Group.
Meanwhile, the latest annual report from leading printer vendor Hewlett-Packard shows that its net revenue from consumer printers fell 4% in fiscal 2011. "In recent quarters, HP has been challenged by several external factors, one of which is weak consumer demand," acknowledges Tuan Tran, general manager of HP's consumer inkjet business.
"At the consumer level, it's a market under siege," adds Keith Kmetz, analyst at market research firm IDC in Framingham, Mass. "I used to print driving directions. Now I use a GPS. Now kids don't have to submit papers in school, they can submit electronic documents. I only need a printer [at home] when I bring work home."
There is also a generation gap, with young adults seeing little reason to print even while their elders continue churning out hard copies, notes Dan Ness, head of MetaFacts, a market research firm in Encinitas, Calif. Those in the 18-to-24 age range have the lowest incidence of high-volume home printing, dramatically less than those at age 54 and above, he says.
"Those with more experience tend to print more," Ness says. "We attribute it to habit rather than any need for hard-copy backup, but eyesight may also have something to do with it, since they may have a hard time looking at pictures on handheld devices."
Consumers want wireless
Those consumers who are still buying personal printers gravitate toward desktop color printers in the price range of $79 to $149, HP's Tran says. These same buyers also want wireless connectivity so that multiple devices can share the unit, scanning and copying facilities, larger ink cartridges, and access to online apps and cloud printing.
Veneeta Eason, Kodak's director of future product marketing, makes similar observations, pointing to four trends driving the home printer market. "First is wireless printing, so that entire households can connect to a printer. Mobile printing is important, since there is a lot of desire to print from smartphones. Then there is cloud printing for access to email and presentations, and then social networks." With an estimated 250 million photos being uploaded daily to Facebook, there should still be significant photo printing going on, she adds.
Others see no market salvation in social media. "As far as Facebook and other social media is concerned, I don't think it drives print," counters Kmetz at IDC.
"Social media like Facebook is not conducive to print," agrees Jamieson at the Photizo Group.
Print services replacing printers
On the other hand, the retail printing market is exploding. The financial results for the first quarter of 2012 for Shutterfly, a leading consumer-oriented service where users can upload pictures and have prints sent to them in numerous formats, show net revenue growing at an annual rate of 60%. Net revenue for personalized products -- which include T-shirts, quilts and coffee mugs with photos on them -- was growing at a rate of 72%.
Shutterfly sells 4-x-6-in. prints for 15 cents each. To print the same photo on a low-end inkjet would cost, on average, 44 cents just for the ink, says Rod Eslinger, comparative advertising manager at Kodak. But even if ink were free, the market trend would presumably be much the same, since most of the growth -- for online vendors Shutterfly and Snapfish, as well as chain stores like Costco, Wal-Mart and Walgreens -- is in personalized products such as mouse pads, fleece blankets, iPhone covers, jigsaw puzzles, and a variety of other items that cannot be produced with a home printer.
"We built this business on the back of 4 x 6 prints, and we still sell a lot of prints, but most of our revenue is from personalized products," says Karl Wiley, general manager at Shutterfly in Redwood City, Calif. "That is what the consumers are voting for with their wallets."
But despite the advantages of using online services, or the primacy of social media for picture sharing, no one is saying that people are going to stop buying printers. "There are 1.2 to 1.5 trillion pages produced on an annual basis in the U.S., and that will take a long time to kill," says Kmetz.
And there are still people like Susan Polizzotto of San Diego, a mother of two who recently accompanied a kindergarten field trip where she agreed to the teachers' request to take a picture of each of 44 pupils in front of a floral display. The teachers wanted the pupils to use the pictures in a Mothers' Day craft project. She went home, printed two 4 x 6 copies of each during an hour while she did other chores, and took them to school.
"The home printer is for times when you want things immediately and you are not planning to go to Costco," she says. "The cost of the ink about equals the time and gas and bother involved in going to the store. But if they had wanted 500 copies, that would have been different."
Then, for use by the parents, she uploaded the photos to Facebook.
Small businesses also print less
Another market for small inexpensive printers -- small businesses -- is also printing less and moving to online printing services, sources agree.
"There is always going to be a demand for printing, but we are fighting over a shrinking pie," says John Lees, director of print services for wholesale buying club Costco in Issaquah, Wash. Costco offers printing services to small businesses through its eight business centers. "Medical and dental offices were the mainstay of our business, with patient profile forms, but these days they hand you a tablet to get your information when they draw blood," Lees notes.
Jim Hamilton, an analyst at market research firm InfoTrends, notes that employment in the U.S. printing industry fell 40% from 1999 to 2011, from 825,000 people to fewer than 500,000. Basically, he says, this indicates that the industry has consolidated around the printing vendors with better Internet presences and better marketing.
"It's been hard on mom-and-pop print shops who relied on walk-in relationships ten years ago," Hamilton says. Customers now expect their printing vendors to have digital archives where documents can be stored for printing as needed, eliminating the need for warehousing, thus making the printer vendor part of their business process, he says. Having an automated Internet interface for selecting the binding, paper and other options appeals to buyers, and the national services and chain stores have all the advantages in that field, he adds.
Lamont Wood is a freelance writer in San Antonio.
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