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Wide Format Graphics Research

Hardware, Media, and Ink Revenues Reach $9B by 2014

By Mark Hanley

The wide format graphics market generated total manufacturer revenues—at the retail level for hardware, media, and ink—of $7.9 billion in 2009 and is expected to generate manufacturer revenues of $9 billion in 2014, a compound annual growth rate (CAGR) of three percent. This report is a summary of analyst firm I.T. Strategies’ recently published 2010 Wide Format Inkjet Graphics Forecast.

To explain the methodology, the report is based off of vendor 2009 sales unit data gathered in February and March 2010 from vendors, with 90 percent participation. The install base, as depicted in unit sales, for each sector is calculated separately. Consumable units for media and ink are based on the firm’s user research within each sector and cross validated against vendor revenues. All dollar levels are based on list pricing—at dealer level where products are sold through dealers—and do not take into account discounting. Growth rates are conservatively based on the moving average historical trend line, which is modified to take into account a sector’s maturity.

2010 Wide Format Graphics Forecast Segmentation
I.T. Strategies divides the wide format inkjet graphics market into three primary segments by technology—aqueous, solvent, and UV. Each segment is further segmented by size or price—see chart labeled 2010 Wide Format Graphics Forecast Segmentation on page 29. The analyst firm classifies anything over 24 inches in width as wide format.

The forecast is a market model designed to be flexible in order to reflect changing dynamics. Some years it changes slightly, other years there are more significant changes based on market activity. This year latex printers are included in the low-level/eco-solvent sector of the forecast for the first time. They are included because the analyst firm believes that the primary thrust of latex technology is to displace these printers. I.T. Strategies cannot split latex technology out or include it as a separate sector because of its policy to not reveal market share, which would occur because there is only one vendor—Hewlett-Packard—offering latex technology.

Revenue from Hardware, Media, and Ink by Type of Printer
Total wide format graphics revenues for hardware, ink, and media are forecast to grow from $7.9 billion in 2009 to $9 billion by 2014, a CAGR of three percent, see chart on page 29. Both the UV and solvent/latex sectors show increases. UV will grow from $1.6 billion in 2009 to $2.6 billion by 2104, a CAGR of 11 percent. The solvent sector, driven by the addition of latex technology to the low-level/eco-solvent sector, grows from $3.1 billion in 2009 to $3.7 billion in 2014, a CAGR of four percent. The following part of this report is divided by the three technologies—aqueous, solvent, and UV. Each section outlines unit sales and revenue in U.S. dollars. The charts are labeled accordingly.

Aqueous Inkjet Printers
I.T. Strategies segments the aqueous sector into professional and in-house or corporate—as depicted in the 2010 Wide Format Graphics Forecast Segmentation chart. The professional sector—further segmented into the low end of inkjet printers ranging from 24 to 36 inches and the high end, greater than 36 inches—is made up of print-for-pay (PFP) shops that sell the output from the printers. The in-house market consists of corporations, schools, hospitals, and other similar types who buy wide format inkjet printers for internal use and do not sell the output. Aqueous markets were maturing before the recession and that process accelerated with flat hardware sales over the forecast period and a declining install base. Although a mature market, it remains a very large and significant source of revenue and margin for the vendors in it.

Aqueous inkjet printer unit sales are forecast to decline from 44,515 printers in 2009 to 43,413 printers in 2014, a CAGR of zero percent, see chart on page 29. Both the professional and in-house sectors show modest declines in sales of aqueous wide format printers.

Total revenues for hardware, media, and ink for wide format aqueous inkjet printers will decline from $3.3 billion from 2009 to $2.6 billion in 2014, a CAGR of negative four percent, see chart on page 30. Note that the statistics provided here are only for the display graphics market. As a result, they may understate the aqueous market since they do not include the CAD and technical drawing markets.

Solvent Inkjet Printers
I.T. Strategies divides the solvent sector into three main subsectors Chinese, Korean, and Taiwanese; Western OEMs aggressive solvent; and Western OEMs low-level solvent—also referred to as eco-solvent. As mentioned in the introduction, this year latex printers were added to the low-level/eco-solvent sector of the forecast.

The low-level/eco-solvent sector is the second largest wide format market after aqueous. By the end of this forecast period it becomes the largest. What sustains and increases growth in this sector is the addition of latex technology. This sector became and has remained strong due to its relatively low hardware cost compared to UV, its ability to open up an external and internal market to smaller print shops, and its relatively lower ink price compared to aqueous.

The aggressive solvent sector has been in decline for a number of years and the recent economic crisis negatively impacted it in the U.S. and Europe.

Solvent inkjet printer unit sales are forecast to grow from 22,709 printers in 2009 to 31,295 printers by 2014, a CAGR of seven percent, see chart on page 30. Western manufacturers make up about 75 percent of the sales in 2009 and are expected to roughly maintain that share through 2014. Not surprisingly, low-level/eco-solvent printers make up the largest segment of the solvent market with sales growing from 16,807 in 2009 to 22,704 in 2014, a CAGR of six percent. These printers are used for both indoor and outdoor applications, making them a flexible choice for print shops wanting to enter the market and for those that want to offer their customers a broad range of products.

Solvent printers generated hardware, media, and ink revenues of $3.1 billion in 2009, see chart on page 30. Solvent revenues are forecast to grow to $3.7 billion by 2014, a CAGR of four percent. Throughout the forecast period the largest share of revenue continues to come from low-level solvent printers. Revenues in this sector are expected to increase from $1.7 billion in 2009 to $2.7 billion in 2014, a CAGR of ten percent.

Western OEMs aggressive solvent revenues are forecast to decline from $660 million in 2009 to $253 million in 2014, a CAGR of negative 17 percent, a sign of a long-term trend that this sector has passed its development peak. This decline in revenues reflects the continued increasing competition from UV flatbed and roll-to-roll printers, as well as more of a focus on sustainable UV technology by print shops.

UV Inkjet Printers
I.T. Strategies segments the UV inkjet sector into four areas—low-end and high-end flatbed and roll-to-roll, all of which experienced growth. UV inkjet printer unit sales are forecast to grow from 2,801 printers in 2009 to 4,386 printers by 2014, a CAGR of nine percent, see chart on page 30. Low-end flatbed UV inkjet printers continue to be the largest segment of UV inkjet printer sales, growing from 1,666 printers in 2009 to 2,609 by 2014, a CAGR of nine percent. The growth in UV inkjet printers—both flatbed and roll-to-roll—opens up high-volume digital and screen markets to UV solutions at the expense of solvent inkjet and screenprinting. PFP shops continue to consolidate demand on highly productive UV printers that can run at lower ink costs with a smaller staff.

UV inkjet printers generated hardware, media, and ink revenues of $1.6 billion in 2009 and are forecast to increase to $2.6 billion by 2014, a CAGR of 11 percent, see chart on page 32. All UV sectors are forecast to increase in revenues with high-end flatbed UV printers increasing the most, growing from revenues of $655 million in 2009 to $1.1 billion in 2014, a CAGR of 17 percent.

Hardware Unit Sales and Revenue
Unit sales of wide format graphics printers show modest growth throughout the forecast period, growing from 70,024 printers in 2009 to 79,094 by 2014, a CAGR of two percent, see chart on page 32. Sales of aqueous inkjet printers are expected to decline slightly from 44,515 in 2009 to 43,413 in 2014, a CAGR of zero. Sales of solvent inkjet printers driven by low-level/eco-solvent and latex printers are expected to grow from 22,709 in 2009 to 31,295 in 2014, a CAGR of seven percent. Sales of UV inkjet printers are expected to grow from 2,800 in 2009 to 4,386 in 2014, a CAGR of nine percent.

Hardware revenues from wide format inkjet graphics printers are forecast to grow modestly from $1.3 billion in 2009 to $1.6 billion in 2014, a CAGR of four percent, see chart on page 32. Over the forecast period, the strongest growth area for hardware revenues is UV printers, which are forecast to grow from $491 million in 2009 to $710 million in 2014, a CAGR of eight percent, reflecting the productivity gains they offer to print shops. Growth in revenues from solvent printers, from $512 million in 2009 to $620 million in 2014, is driven by low-level/eco-solvent and latex printers.

Media Square Feet and Revenue
Wide format graphics printers produced 16.3 billion square feet of output in 2009 and this is forecast to grow to 20.8 billion square feet by 2014, a CAGR of five percent, see chart on page 32. In 2009, solvent printers made up 71 percent of the total square feet—11.6 billion. This is expected to increase to 15 billion square feet by 2014, driven by eco-solvent/latex printers. In 2009, UV printers made up ten percent of the total output—1.7 billion square feet. This sector is expected to increase to 15 percent of the total square feet—3.2 billion—by 2014, a CAGR of 14 percent, reflecting the high productivity of UV systems.

Worldwide media revenues from wide format inkjet printers were $4 billion in 2009 and are forecast to grow to $4.3 billion by 2014, a CAGR of two percent, see chart on page 34. Media revenue from UV printers is expected to grow from $740 million in 2009 to $1.8 billion by 2014, a CAGR of 19 percent. Media revenues from both solvent and aqueous inkjet printers are expected to decline at a CAGR of negative five percent, respectively.

Ink Liters and Revenue
In 2009, wide format inkjet printers consumed 29.1 million liters of ink. This is forecast to increase to 46 million liters by 2014, a CAGR of two percent, see chart on page 34. Throughout the forecast period, solvent printers consumed the majority of inkjet ink liters, 22 million in 2009—76 percent of the inkjet ink market. This is slated to grow to 38 million liters, or 83 percent of the market, in 2014, a CAGR of 12 percent. UV inkjet ink will grow from 1.8 million liters—six percent of the market, in 2009 to 3.2 million liters—seven percent of the market, by 2014, a CAGR of 12 percent.

In 2009, worldwide wide format graphics inkjet ink revenues were $2.6 billion and are forecast to grow to $3.2 billion by 2014, a CAGR of two percent, see chart on page 34. Wide format aqueous inkjet ink revenues are expected to decline from $1.7 billion in 2009 to $1.4 billion in 2014, a CAGR of negative 14 percent. Aqueous inkjet revenues make up the largest percentage of wide format ink revenues until the end of the forecast period when they are overtaken by solvent ink—including eco-solvent and latex. UV inkjet ink revenues are forecast to grow from $268 million in 2009 to $414 million by 2014, a CAGR of nine percent.

Mark Hanley is president of I.T. Strategies. With over 21 years of experience, he specializes in researching digital color printing technologies. Hanley travels around the world, facilitating partnerships and strategic alliances between manufacturers in Europe, Japan, and the U.S.

Editor’s Note
Compared to last year’s report, when I.T. Strategies forecasted total wide format inkjet graphics revenue for hardware, media, and ink to grow from $8.7 billion in 2008 to $9.3 billion in 2013—with a CAGR of only one percent, this year’s outlook is positive. The firm forecasts total wide format inkjet graphics revenue for hardware, media, and ink to grow from $7.9 billion in 2009 to $9 billion in 2010, a CAGR of three percent, see chart on page 34.

Once again, UV is powering the graphic arts. As I.T. Strategies found, hardware revenues continue to be driven by increased sales of UV flatbed and roll-to-roll printers, which are expected to grow from $491 million in 2009 to $710 million in 2014, a CAGR of eight percent. Additionally, media revenues are forecast to grow from $4.0 billion in 2009 to $4.3 billion in 2014, a CAGR of two percent, also driven by UV printers.

Vendors continue to manufacture new devices and upgrade existing products to service this growing and profitable segment.

Aug2010, Digital Output

 
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