At the beginning of 2002, Evans Research Corp. (ERC) forecast printer shipments for the year at 2,270,409 units. Over the first half of the year, shipments were well below what was forecast based on seasonality, and were actually lower than unit shipments over the first half of 2001. Given that

it appeared vendors would not be able to achieve the forecasted numbers for 2002, ERC downscaled expectations for the year.

In stark contrast to the first half of 2002, the second half of the year was inordinately strong. With shipments in most printer segments well above figures for the same period in 2001, vendors rebounded and by year end the final tally was 2,266,136 units — a scant 4,300 units under forecast. Shipments, therefore, were up by five per cent from 2001.

Technology appeared to be the driving force in 2002. While the single-function inkjet market was down significantly, the inkjet MFP market expanded by 136 per cent in 2002. The net result was that inkjet technology was up by nearly six per cent compared with 2001.

For the most part, this was driven by home users who were selecting MFP units instead of their single-function siblings. Still, if one were to consider the markets for these products based upon functionality, we would see that the small business/SOHO market, albeit much smaller, was also strong. Generally, a business user would prefer to have hardware fax capability. These units were above $500 in 2002. Shipments of these products totaled 40,000 units, which was double the volume in 2001.

Laser-based MFPs are arguably not the choice for consumers as prices were typically well above the $500 unit mark. This segment accounted for approximately 43,500 units which was about 10 per cent higher than in 2001.

Single-function laser products were up by six per cent in 2002 which was somewhat higher than what ERC had anticipated. The theory here is that users will begin to migrate to colour lasers at the expense of monochrome technology.

For the most part, however, vendors have been unable to attract the small business users as there have not been attractive packages under $1,500. The first half was very slow for colour lasers with shipments lower than in the prior year. However, vendors rebounded in the second half and 2002 shipments were 15 per cent above the volume in 2001. Technology was a factor here as well. HP announced and shipped higher speed products which was a huge part of the success of this segment in 2002.

Preliminary first quarter data suggests that these trends will continue in 2003. In addition to the opportunities that exist for resellers in the small business/SOHO markets for MFP products, the colour laser market should be strong in most business segments.

Overall, ERC expects MFP shipments to increase by at least 55 per cent in 2003 and higher growth is not out of the question. Colour laser shipments are projected to increase by 26 per cent in 2003.

Another product segment which should show strong growth in 2003 and beyond is the business MFP segment. Traditional copier companies such as Xerox, Canon and Toshiba are very strong here, but will face challenges from printer companies such as HP and Lexmark in coming years – particularly in the entry-level segment.

Companies with a large number of branch offices, such as banks, will continue to look at these products to handle local printing, scanning, copying and faxing requirements to either complement or replace current single-function products. Recognizing the future importance of these products, ERC recently launched a quarterly program that tracks and reports on shipments of both business MFPs and copiers.

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