By Mark Hanley
The 2016 calendar year was another great one for wide format. Wide format inkjet markets again showed strong above average, year-to-year growth in low-end, highly localized roll-to-roll eco-solvent and latex markets, and in high-end UV markets. While aqueous markets continue to decline slowly.
The eco-solvent and latex market with its capability to generate small quantities of indoor/outdoor graphics—mostly outdoor-oriented these days—dominates revenues and physical output across the whole market. UV systems continue to provide unmatchable production solutions to larger scale print providers.
On top of this, the soft or textile signage market—which I.T. Strategies counts separately to the wide format market, but part of whose output is used as a form of wide format display output—is now more than 20 percent of all other wide format inkjet markets combined. This makes it a general adoption preference for all sizes of print providers in all wide format graphics channels.
Topline Numbers Analysis and Projections
The statistics in Chart A show the overall size of the wide format inkjet market—excluding soft signage—worldwide with some projections to 2021. The revenue data is measured at the level of pricing from vendors to dealers or users according to the different channels used.
For a market of nearly 25 years vintage, it still grows remarkably at a demand level. That reflects the unsaturated and ever-more-creative use to which the consumer economy places on localized store, retail, and commercial graphics—the largest, if not the only dynamic driver of the markets overall.
That said, the vendor picture is not quite as enticing, even though there is still growth. Behind that growth is efficient competition resulting in ever-more productive systems at lower acquisition prices.
Projections from 2016 to 2021
Chart B shows projections from 2016 through 2021. It also provides a snapshot of the year-over-year growth 2015 to 2016. The difference between the projected five year growth rate and the year-over-year number shows what is meant by above average, year-over-year growth rates. The wide format graphics market cannot be measured accurately just from year to year. Acquisition cycles and technology adoption rates are longer than a year, resulting in a growth rate that averages out over time—more like three to five years.
The statistics in Chart B refer to units of systems sold and ink and hardware revenues. Underlying these statistics are output statistics around square meters printed in total, in turn driving ink sales for vendors. Output statistics are a truer measure of final market demand and the numbers show this in Chart C.
Chart D provides an updated graphic representation of the relative sizes of each wide format sector in terms of vendor revenues for hardware and ink and square meters printed.
As in the last few years, aqueous professional and in-house markets continue to exhibit mild decline, though they continue to yield large revenues and profits for participants in those markets.
Aqueous technology is still seen by most as yielding by far the highest print quality of any wide format technology. A sub-sector of the aqueous market is graphic arts and packaging proofing, where most printers swear by aqueous color-perfect systems. Similarly, aqueous is still the go-to answer for applications where quality is the prime value such as portraiture, rendering of product, or building projections.
The true decline in aqueous markets is due to the migration of the commercial wide format graphics market towards eco-solvent and latex solutions. Over 20 years ago aqueous systems were the only option, but they were not capable of generating outdoor output that could withstand light, water, and other environmental influences.
Then along came eco-solvent, and after that the functionally equivalent latex, which is really aqueous technology with the addition of water-soluble solvents that allow it to print on film providing a permanent bond—ink to substrate. This opened the external graphics market to low-cost roll-to-roll systems. It was previously only open to aggressive solvent systems. That in turn sparked a revolution in non-regulated, on premise signage, which is what drove the growth in wide format graphics in the last ten years.
Eco-Solvent and Latex Markets
The maturity of this sector has been predicted for quite a while now, but every year the growth in system sales is confounding. 2016 is the same story. This is mostly demand driven as the uses being discovered commercially for this universal graphics print technology keep growing. A good example is fleet graphics. Fleet graphics have been digitally printable for years, but the real acceptance of it and its value has come more slowly, so that by now the true market for it is really just beginning to flourish.
The growth is also partly supplier driven in the sense that since its advent, latex was perceived as a major threat by the Japanese suppliers of eco-solvent systems. The proliferation of eco-solvent systems as a defensive reaction has been spectacular. This means more competition, resulting in better systems for less money.
Aggressive Solvent Markets
Large-scale and outdoor digital graphics began many years ago as a direct consequence of the availability of aggressive solvent systems. They are still out there in the install base—and are still sold by Asian vendors—but are as good as gone as new systems in Europe and North America. Partly no one liked the effects of volatile organic compounds from the ink, but it was also a market of little interest to vendors whose control of a very low-priced ink market vanished early on.
UV markets in wide format graphics represent the largest use anywhere of UV inkjet technology. From being a convenient flatbed technology this sector has become the basis for generating wide format graphics in production quantities. This does not mean high volumes day in, day out, but very high seasonal or occasional burst speed capability on a highly accelerated level perhaps exceeding average volumes by up to 20 times.
While this burst volume capability is strategic and growing well, in the overall context of the wide format graphics market UV is still a relative second in line to eco-solvent and latex markets in aggregate volume terms. It is also a lower priced ink market. While consumable revenues are climbing relative to hardware revenues, hardware revenues still exceed consumables revenues, which is not the case for eco-solvent and latex markets.
The 2016 sales compared to 2015 by UV sub-sector are shown in Chart E. Output of print by UV sub-sector is illustrated in Chart F.
This data shows a general spurt in growth across all UV formats. Within these numbers there has been some significant changes in vendor positions. As with eco-solvent and latex this trend is traced back to demand development driven by an improved consumer economy and by a richer competitive offering in competitive graphic products. In particular the growth in roll-to-roll UV systems is striking. This could be influenced by company acquisitions, but it may mean a higher scaled modern graphics market at major events and retail-related users.
At the very top of the high-end flatbed UV market is a sub-sub-sector referred to as super high end for systems that are close to $1M or over and generally can print around 5K square feet per hour or more. Chart G is the history of sales of those systems.
Soft Signage Graphics Market
Soft signage is not new, but it has seen a spurt in growth in the last three to four years to the point where its output now represents more than 20 percent of all the rest of inkjet wide format graphics output. It has a high end—over $100K acquisition price, and a low end—under $100K acquisition price. Its analysis is complicated by the fact that while the high-end systems are soft signage dedicated, and can be counted cleanly, the larger low end is made up of systems that are sometimes sold for soft signage but are more often sold as apparel printers. It is hard to sort out usage at the print provider level on the simple basis of placements.
The technology used for soft signage is dye-sublimation printing, which allows for a high-quality, brilliant color gamut on synthetic fibers. This is uniquely attractive to signage users. Soft signage is also very light, easy to transport, store, and recycle. As a result of these factors there is not a print outlet in wide format anywhere that does not now want to have this technology as part of their offering.
The summary statistics offered in analysis of the soft signage market in 2016 are illustrated in Chart H.
Mark Hanley, president, I.T. Strategies, has over 20 years of experience in the electronic printing industry. He specializes in identifying new markets for digital color printing technologies. In addition to conducting research and consulting, he travels extensively around the world, facilitating partnerships and strategic alliances between manufacturers in Europe, Japan, and the U.S.
Prior to co-founding I.T. Strategies, Hanley organized the European operations of CAP International, subsequently known as BIS Strategic Decisions. From 1990 to 1992, he was services director at BIS, responsible for the management and growth of electronic hard copy information services in Asia-Pacific, Europe, and North America.
Aug2017, Digital Output