Analyst firm I.T. Strategies, Inc. presents its summary on wide format market statistics based on data gathered in detail from market vendors in the 2010 calendar year. The findings represent a confirmation of the re-emergence of the market to its normal mode, which is essentially growth even after 20 years of market development. This growth is led by the UV and eco-solvent sectors, with aqueous still providing a rich base for consumable revenues for longer standing, larger vendors.
I.T. Strategies’ wide format graphics forecast has been issued annually since 1994. The forecast is based on systems unit sales input of over 90 percent of vendors in the market representing at least 90 percent of sales for the prior calendar year. Further data regarding pricing, consumption, utilization rates, and substrate usage is gathered through secondary research and is regularly refreshed through user research among utilizers of wide format technology each year. Various methods of cross analysis are employed as sanity checks on individual data points, for example ink and media consumption calculations are compared against real vendor revenues after hardware.
Strictly, the forecast is a projection of the prior historical linear trend and contains an absolute minimum of assumptions about future change by intent. It is divided into four major technology sectors—aqueous, eco-solvent, aggressive solvent, and UV-curable. The aggressive solvent sectors are broken down into systems less than 36 inches in width—this does not include 17-inch systems; devices wider than 36 inches; and systems used in house or corporate.
The UV-curable sector is broken down into low-end UV for flatbed systems with an acquisition price below $200K and high-end UV flatbed systems for systems with an acquisition price above $200K. The same $200K threshold is applied to splitting UV roll-to-roll systems into low-end and high-end systems. Hybrid systems are usually classified into either flatbed or roll-to-roll according to their perceived base configuration. Latex technology is included in eco-solvent as it is a one-vendor market.
Note that dollar amounts in the forecast are partially normalized from foreign currencies and mostly do not incorporate discounting assumptions. List prices are normally used even though discounting of hardware and consumables is widespread. While our aggregate revenue numbers are accurate and in general conform to vendor revenues by conscious adjustment, individual positions may overstate values somewhat.
In general, prices are used at dealer level where dealers are involved, that is to say, the price that the dealer would pay for the product, including its margin. Real vendor revenues for products traded through distribution would be less by the amount of the dealer margin—up to 30 percent.
Total Market Analysis
All wide format sectors together as previously defined show from 2010 projected to 2015 a compound annual growth rate (CAGR) of 2.62 percent in system unit sales, but a CAGR of 6.94 percent in ink and hardware revenues to vendors. After the last two years this can be called a success and a return to good growth. Not shown in the statistics here is the fact that this market generates for print service providers (PSPs) worldwide each year in excess of $30B in revenue. As a testimony to the unique value of digital, this revenue number represents multiples of the value of the analog printed display graphics market. However, in terms of printed area, analog remains two to three times bigger than the digital market. That presents an interesting context in what is essentially the failure of the digital market to displace most analog display graphics print. It proves that digital doesn’t need to and probably shouldn’t, since it possesses economic and value advantage where it is now and is still growing.
Aqueous Market Rebounds
Aqueous markets recovered more than anticipated. Volumes are below 2008, but are up 16 percent from 2009. This is a function of large-scale install base replacement and the trend will probably not continue. Ink revenues per printer are down due to a shift to lower width units in the install base, as well as to lower hardware costs to bring in lower scale users. From 2010 to 2015 there is a continuing trend to mild decline with system unit sales decreasing a CAGR of 0.6 percent and ink and hardware revenues decreasing a CAGR of 0.81 percent.
Solvent Market’s Strength
Total solvent/latex numbers nearly doubled from 2009 to 2010. The main reason was the under inclusion of Chinese vendor units before 2010. Fresh research undertaken in China indicates a much bigger market than previously thought, though with minimal penetration into developed markets. A secondary and more important reason is that eco-solvent printers are largely unaffected by latex sales.
Latex did well as expected and is a great success, but does not seem to cause attrition to eco-solvent sales. The eco-solvent market effectively re-attained its 2008 volume. It may be that the relative affordability of eco-solvent as a kind of universal technology—for indoor and outdoor display—versus UV boosted the market’s performance, which does not relate to latex. This is speculation. Eco-solvent appears robust.
A problem with the forecast for solvent is that for reasons of not wanting to reveal a vendor’s market share, the single vendor that sells latex has products rolled into eco-solvent for want of being able to create a separate new sector.
As part of the solvent numbers, aggressive solvent is doing well in non-developed territories where most Chinese vendors sell. In the U.S. and Europe, aggressive solvent is largely dropped by vendors and users alike, though it is far from dead—one developed market vendor launched a new system in 2010. The developed market trend is driven by health, safety, and sustainability issues.
UV Graphics Market Grows Best
The UV market in general appears to show some weakness in terms of sales in 2010 relative to 2009. On the other hand, 2009 was not as bad in UV as in other markets. There is also some indication that some of the bigger issues related to specific vendors’ position shifts rather than demand or users. The sense is that eco-solvent may somehow be a little more competitive to UV than many assume. By contrast, some specific systems and vendors did very well within the overall trend, indicating vendor shuffling more than changes in demand patterns. Where the vendor count is limited this can affect the growth rates year-on-year, which is not necessarily reflective of pattern change demand.
Most of the UV segment is largely technologically unchallenged and is making solid progress in its coverage of the market. It is in full growth mode when allowance is made for some shifts in vendor positioning. The high-end UV flatbed market is still only about 60 percent of what it was in 2008, which is the combined effect of attrition by lower priced UV flatbed systems, as well as the fact that I.T. Strategies included true industrial systems in its pre-2011 numbers where they may not have belonged, so that the 2008/2011 difference may not be as large as it appears.
Though not proven, it is believed that the old low-end UV flatbed market may just be at the peak of its curve. On top of that, a number of vendors are now down-specing high-end systems for lower prices and enticing former low-end customers to upgrade. That would be a net sector shift upwards. Old definitions do not remain so easily.