Consumables market worth more than $1 billion in 2003

Over $1 billion worth of ink, toner and dot matrix cartridges were sold in Canada last year, according to a new study.

The 2003 Consumables Market in Canada, recently published byEvans Research Corporation (ERC), reveals that vendors, third parties andremanufacturers collected more

than $1.2 billion on sales of ink, toner and dotmatrix cartridges.

This meant that revenues were up 10 per cent compared with2002. ERC had expected the market to soften considerably, believing that theinkjet market would flatten out in 2003 and beyond. However, shipments ofinkjet and inkjet MFP printers rose 21 per cent last year.

New applications are driving the demand for inkjet products,according to the research firm. Among the biggest is that consumers arepurchasing inkjet multifunction printers (MFPs) at an incredible rate. Shipments of ink MFPs approached 928,000 units in 2003 compared with sales ofjust 376,000 the previous year. Initially ERC believed that consumers weresimply purchasing MFP products rather than their single function inkjetsiblings. However, when the tally for 2003 was in, shipments in the year weredown just 160,000 units from the total of 1.5 million units in 2002.

Bill Fournier, ERC’s senior printer analyst and author of the consumablesreport, stated that two trends were identified as the reason for the continuedstrong growth in the inkjet market. “First, consumers were purchasing MFPs asoffice products rather than printers. That is to say, MFPs were an inexpensiveway to bring copying, faxing and even scanning into the household or SOHOenvironment.”

“Next, it would appear that the long anticipated massadoption of home photography through photo printers was underway”.

Given these two trends, the inkjet market showed stronggrowth rather than slowing down. Furthermore, combined sales of laser productsincluding single function units, MFP versions and colour offerings were strong. Shipments of lasers were up almost 14 per cent in 2003, somewhat strongergrowth than ERC had anticipated.

ERC expects overall revenues to rise by seven per cent in2004 and six per cent in next year, and then five per cent over the followingtwo years. The result is that the consumables market should be worth more than$1.5 billion in 2007.

Leading the way in revenue last year was inkjet cartridgesat approximately $636 million. Toner was close behind at $578 million. Ink is expected to maintain the lead through to 2007.

Total inkjet cartridges shipments exceeded 20.2 millionunits in 2003 – up 29 per cent from the previous year. By contrastinkjet cartridge revenues were up just 13 per cent. The primary reason for thediscrepancy was the shift toward products that utilize individual colourcartridges rather than multi-colour units. Again, this is somewhat tied to theincreasing adoption of photo printing.

Another factor was the increasing share held by 3rd partyproducts and to a lesser extent what the industry calls CIPRA companies. CIPRAis a national association of remanufacturers of toner cartridges and genericproducts such as inkjet refill kits that directly services end-users.

While overall inkjet revenues grew 13 per cent in 2003,third party sales were up 74 per cent and CIPRA sales up 56 per cent comparedwith 2002. Given that individual colour cartridges are less expensive as arecompetitive non-vendor offerings, it is not surprising to see significantlylower revenue growth compared with unit shipment growth.

On the toner side, colour is beginning to play a greaterrole, although revenues are still much smaller than for black toner. In 2003, black toner generated $509 million compared to just $69million for colour toner. Nonetheless, colour was up by 20 per cent comparedto just six per cent for black. In 2007, black toner is expected togenerate $602 million in sales while colour sales will rise to $118 million.

The Evans consumables report investigates printerconsumables and projects market growth through 2007. The report also examinesmarket share performance of printer vendors and third party suppliers in termsof unit shipments and revenues in addition to channels of distribution.

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Jim Love, Chief Content Officer, IT World Canada

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