The primary trends that the Hardcopy Observer confirmed were the moves toward Multi-function (MFPs) and color devices, while the monochrome laser business is holding relatively steady, with a slight uptick caused by increasing units in the low end of the market. Worldwide shipments for color laser printers increased about 25%, while monochrome MFPs increased 8.6% and monochrome lasers increased 2.7%. While unit shipments were up across all of the laser categories, total revenue figures decreased, due to declining prices.

In the Color MFP market The Hard Copy Observer saw shipments increase by about 38%, with revenues up 23%! I’m sure glad we focused on launching more color MFP offerings in this category in Fall ’06. I wish these numbers were broken out by printer-based vs. copier-based MFPs, as I believe you would then see even more evidence of the move to printer-based MFPs. and away from copier-based MFPs.

“In general, though, life was good for companies that make their living in the business-to-business (B2B) space selling laser products of any description, although offering MFPs and color product multiplied a firm’s chances of success.”

-The Hard Copy Observer, December 2006

If overall shipments are up so for laser-based devices, where is the countervailing decline? Most of the decline has been at the low-end of the single function inkjet printer lines. The Hard Copy Observer states, “In 2006, some vendors began a deliberate exit from the sub-$50 inkjet printer market. Epson and Lexmark made public pronouncements about their exit strategy, while other vendors simply let their entry-level ink jet printer business slowly fade away.” I don’t think all of the vendors are fading away, but carefully managing their shipments below $50. No different than Toyota wanting you to buy a Camry instead of Yaris.

In addition, perhaps some customers see cost of ownership and other advantages with color laser printers, relative to inkjet printers. At the same time, new inkjet products like the HP Officejet Pro K550 Color Printer are shattering the myth that inkjets are not suitable for the office or have running costs that are too high. These printers look great and perform well on a business desktop and complement our Color LaserJet product portfolio. The great thing about the printing business is that customers are the winners–they get to choose a variety of products–ink and laser, single function and multi-function at similar price points and pick the right product that meets their printing needs (I will cover this in a future blog).

You might also ask what is driving the continued strength and the shifts in the Imaging & Printing market? While I talked in greater depth on that in the previous Trends blog--these shifts amount to giving customers what they want. I & P end-users want to produce color documents as they are generally more persuasive. They also want the flexibility to print, scan, digitally send (fax) and copy as close to their workspace as possible and not from a centralized print and copy shop they have to hike to on the other side of the building. We expect these end-user demands to continue into the foreseeable future and we’re working hard to remain the leading company in fulfilling these I & P needs.

Feel free to comment on how you see the Imaging & Printing market shaping up in the New Year . . .

Happy Holidays!