The last few years were both exciting and volatile in the large format space. The global economy affects how much marketers spend on print, invest in new technology, and how quickly manufacturers bring new products to market.
Demand for environmentally-conscious products and behavior is apparent across all industries now. Some large format leaders were working to fit the "green" model for years; others are continually developing new practices and products.
The last 12 to 18 months are highlighted by major market consolidation. A large group of manufacturers is slowly becoming smaller—meaning fewer options for the customer, but resulting in less difficult purchase choices. This great advancement moves toward a stronger vendor base and revolutionary new technology.
In this final installment, more ink, substrate, and printer manufacturers give their take on the state of the industry.
The economy plays a role in what manufacturers can research, develop, and bring to market; how much new technology print providers can invest in; and the amount of profit the manufacturer and print provider can make. Some manufacturers are not yet experiencing an overwhelming effect from the economy, but are preparing for it.
Rising prices for raw materials and fuel create an impact on many fronts. "We are certainly seeing more raw materials and parts cost increases tied directly, and sometimes indirectly, to higher energy costs," notes Craig Reid, director, global marketing and new business development, DuPont Digital Printing.
For DuPont there is no delay in product development based on the economy. "For us, product development timelines are based more on technology adoption than on economic turmoil," says Reid, "at least in the fast changing and technology hungry digital print environment."
Raster Printers, Inc., is cautious, but the company is not feeling major effects from the economy. "We haven’t seen a measurable change," notes Rak Kumar, president/CEO, Raster Printers, Inc. He explains that Raster Printers has two new products that are doing well so it is hard to judge demand yet. He also notes that 60 percent of the company’s business is outside the U.S.
Based on the current economy, Hewlett-Packard (HP) is not changing its plans for development in 2008 and 2009. In fact, HP announced an extensive new technology launch in March. New products will touch the high-speed inkjet production printing, offset and photo-quality liquid electrophotographic printing, and large format printing segments. To be shown at drupa in May, the portfolio includes a high-speed inkjet Web Press for producing books, TransPromo, and newspapers; an expanded Indigo digital press line; and the first HP graphic arts workflow offering— HP SmartStream Digital Workflow.
Perhaps the most revolutionary announcement is new water-based HP Latex Ink. An environmentally responsible alternative for indoor and outdoor applications, HP Latex Ink produces odorless prints and, coupled with HP Thermal Inkjet Technology, the Latex Inks provide outdoor display permanence up to three years—unlaminated.
"These solutions will be key for players currently in the market to stay in a market. Something that is definitely more difficult than it was a year or two ago," states Aurelio Maruggi, GM, inkjet high-speed production solutions, graphics and imaging business, HP.
HP sees themselves as a partner to their customers. To aid them, they decided it’s important to provide richer solutions. "We are addressing commercial printers. They need to be able to provide a better solution, better service, and better efficiency with what they are doing," says Maruggi.
"What we really try to emphasize with our customers is helping them improve their business responsiveness," adds Scott Schiller, director, marketing and business development, inkjet high-speed production solutions, HP.
HP is also trying to help customers find and highlight new revenue opportunities in an area where softness is happening. "In Asia it’s gotten to the point where they’re selling ad space on coverings of scaffolding on new construction on commercial buildings," notes Manny Kostas, VP marketing, graphics and imaging business, HP. He adds, "It’s a matter of saying it’s not about the business that I have been bidding on for the past ten years, now I step back and ask how do I redefine the value of what I can contribute."
The push to be environmentally conscious—as a manufacturer, print seller, and overall human being—is quite strong. While some comment that the deluge of "green" speak is mere marketing hype, many print leaders are working diligently to be more environmentally "green."
Raster Printers defines "green" as basically no VOCs, says Kumar. "We don’t really have any non-‘green’ products." Kumar notes that Raster Printers’ ink strategy is, "only offer ‘green’ inks—UV-curable inks. No solvents. When we formed the company four years ago we put that in our strategic plan that we would only offer ‘green’ products."
Raster Printers is also concerned about UV curing lamps based on mercury, which are difficult to dispose. In the next 12 to 18 months, Kumar tells us, they would like to move to non-mercury-lamp curing, such as LED.
DuPont did not have to change its processes or products to be "green". Reid says, "We were already doing these things. In the area of digital printing we focus on aqueous and curable polymer ink technologies. We literally made a conscious choice years ago not to sell aggressive solvent inks."
"‘Green’ can mean so many things, including not only the product itself, but sometimes how the product is made, and how the product may be used in the part of the manufacturing of a finished good," notes Reid. "UV-curable inkjet ink printed onto a recyclable synthetic media to produce a banner is significantly more green than printing solvent ink onto polyvinyl. Hopefully, continued conversion will happen in the sign and graphics industry towards these little to no VOC and fully recyclable production options."
Defining "green" is not an easy action. "It’s not something written in a book," says Maruggi. "It’s fact based. You have to clearly explain it internally and externally as to what is the impact."
Kostas notes that there are markets that will not compromise in order to be more environmentally conscious, and there are others that will. "Within printing there’s more that we can do. We’re talking about progressive profitable printing. It doesn’t necessarily need to be totally ‘green’—because what does that mean? We are making progress where we can. We need to do it."
He adds, "As an industry I think that we’re underutilizing the assets that we have today and not communicating the recyclability of some of our materials."
New acquisitions, mergers, and consolidation changed the look of the large format print market dramatically in the last year. A surge of consolidation included EFI, HP, Kodak, and X-Rite, just to name a few.
"Consolidation is a natural phenomenon that takes place in every industry," notes Kumar, citing the auto and aircraft industries as other examples.
"Building a printer is not that much of a black art. It’s reasonably well understood, and we see people building printers everywhere—in the U.S. and Europe, China, and Korea," says Kumar. "The next thing that happens is consolidation because you have too many players and not everybody can make money so people have to consolidate." He adds, "You consolidate or you don’t survive."
Reid, with over 20 years in the market notes, "The cyclical nature of industry consolidation seems to follow technology adoption rates by growth market segments. Inkjet digital printing in wide format and emerging specialty applications is going through tremendous growth, similar to the digital prepress in the commercial printing market of the 1990s, and therefore it’s not surprising that industry consolidation is taking place."
"Wide format inkjet simply got interesting," explains Reid. "Before that, it was all very early adoption, so really only in the past several years has wide format inkjet reached a point of growth and technology change attractive to the big corporations."
"It’s going to continue to consolidate until it basically reaches a commodity state," says Reid. "And then consolidation slows down or stops until a new technology shift happens."
Kumar thinks the recent consolidation will continue. "I see no more than three to five major players over the next couple of years who will control 80 to 90 percent of the market share. A handful of players will make most of the profit and there will be a few people left fighting for the crumbs."
HP made significant investments in the past year, acquiring a number of companies across the industry. "The company is able to be a key enabler for commercial printers to take advantage of the new technologies," says Maruggi. "So it means that in a world where there is a lot of fragmentation, the fragmentation will also be applied to the amount of investment needed to develop these new technologies."
Kostas also notes the benefit of a common workflow available from HP.
"We interact with a very large ecosystem of folks who are innovators and they are all in various different stages," adds Schiller. "There is a very healthy symbiotic relationship."
Technology on the Verge
Kumar predicts three coming trends in the wide format printing market—heightened image quality, continued growth of UV and the "green" movement, and increased speed. "Near-photographic quality in wide format and super wide format will become de facto standard," he says, with a move from 600 dpi quality last year into grayscale 2,000 dpi quality. Kumar says speed will start to reach 3,000 to 5,000 square feet per hour.
Reid sees the growth of adoption in specialty printing and packaging as a future growth area for the market. "Inkjet technology—inks, printheads, equipment, and software—while already disruptive in the wide format market, is getting technically closer to enabling much more specialty and potential packaging applications at real world speeds and quality on a greater variety of substrates," states Reid. "99 percent of packaging printing is still done conventionally. Less than one percent is printed digitally. As technology evolves, wide format inkjet printing will be disruptive to the packaging market."
There is no doubt that the large format industry feels the push and pull of customer demands, environmental concerns, financial issues, and new technology.