Living in Boston as I do, I look forward to Spring more than any other time of year for a couple of reasons. The warm weather gives us Bostonians a chance to play golf, root for the Red Sox, and, at my house, do some Spring cleaning. Every year we pull out what we have gathered over the year to decide if we want to keep it. It is a reassessment of sorts and is very cathartic—what do we keep and what do we let go?
Reassessing the large format market is another rite of Spring at InfoTrends as we collect shipment numbers from the year past, conduct end-user research on buying expectations, and develop our forecasts. We consider the market in three major segments—technical, creative, and production. It accurately categorizes the different types of users in terms of large format printing systems they need, print volumes, and the actual types of prints they make.
The technical market includes large format inkjet printers and large format laser/LED printers and copiers. Looking at the end users perspective, there are three major trends that are happening in the large format technical market that are driving changes. The first is the change from analog copying systems to digital printing systems. This shift has been happening over the past few years but in 2006 it is clear that digital printing systems will out ship analog systems by at least a 3:1 ratio. These digital systems often include scanning systems and scan-to-net software that, in effect, makes the printer/scanner the front door to an enterprise document management system. This can significantly improve communications within a technical or engineering environment.
The second major trend we see in the large format technical market is overall print volumes declining. The development of portable document formats, specifically PDF, has made it so that users can very easily share technical information without having to make what are often cumbersome large format prints. This is extremely important because these two trends are effectively driving reprographics shops into the large format color business.
The third major trend is the more pervasive use of color in large format technical document printing. InfoTrends believes that because of the use of large format technical printing systems in applications such as GIS and E-CAD, the percentage of technical prints that incorporate color will increase even as the total technical print volumes decline.
InfoTrends defines the creative large format market as the group of fine art, proofing, and photography applications that have both high image quality requirements and high archiveability. In the past year, there have been several major suppliers on the printer side doing their best to market the strength of closed-loop systems in the creative market. Epson Corp. has at least two major efforts going on here. Its UltraGiclée Print Certification Program and its Epson Enterprise Wide Print Certification Solution are attempts to more closely integrate Epson print technology into the fine art and proofing processes respectively, creating an application or environment that locks out other print suppliers. We expect that Canon U.S.A, Hewlett-Packard (HP), and Kodak will create alternatives to the Epson program and we’ll see competitive end-to-end solutions for each of these different applications emerge for all of the major vendors.
Canon U.S.A used the Photo Marketing Association (PMA) to launch its newest printer for the creative market—a 12-color pigment-based printing system that offers several automatic features and software, designed so entry-level users can invest with confidence. Additionally, companies like GBC and Seal are now offering low-end finishing solutions to match the widths of these low-end printers, which gives even very small companies the ability to produce professional finished prints in-house.
The opportunities in the creative market are significant because of the volume of potential users. There are thousands of potential adopters of equipment who see it as a small initial investment that can provide excellent profit margins based on the high average selling price of the output.
It should be stated though that this is definitely not strictly a large format market, because some of the most popular models are the Epson Stylus Pro 4800 and the HP DesignJet 30/70/90 which print 13, 17, or 19 inches wide and are used for all three of the high-quality applications that make up the creative segment.
The large format production market has been characterized by change over the past five years, with solvent, eco-solvent, and UV-curable inkjet print technologies all influencing the market in a big way. Aqueous inkjet remains huge, but solvent inkjet and UV-curable inkjet printer shipments are growing fast because of their running cost and flatbed printing capabilities. We expect solvent inkjet print production to grow about 8 percent annually and UV-curable to grow at 40 percent annually. And just when it seems like there is a limited future for aqueous large format printing, we see examples of massive roll-outs like the one Staples just completed. All Staples Copy & Print centers are now equipped with 24-inch HP DesignJet 130ns, and Staples hub locations are equipped with 42-inch DesignJet 5550s, proving that there are still markets for growth for aqueous large format.
This is a trend that we expect to continue in the next five years as advanced new technologies put more and more capabilities in the hands of end users. But if the last five years have been about what we can do with digital printing technologies, the next five may be more about what we should do. The 2006 International Sign Association (ISA) Expo illustrated this point well. An interesting development at the show was the Bio-Ink introduced by Inkware, Mutoh, and VUTEk/EFI. Roland’s new printer, the AdvancedJet 1000, uses a new environmentally safer ink as well. These are still solvents, providing all the benefits in terms of low running cost and the ability to print directly onto uncoated substrates, but they are either low or no VOC inks, which means that no special ventilation systems are required.
The emergence of these safer solvent inks certainly makes it possible that our prognostications on the strong growth of UV-curable may be too aggressive. But if 2005 was any indication, our forecast numbers for UV-curable inkjet are too conservative, as companies like Inca Digital, MacDermid ColorSpan, Mimaki, and VUTEk enjoyed very strong years selling their large format UV-curable inkjet solutions.
Another development that made its mark at ISA was the launch of Onyx version 7.0. It seems like Onyx is trying to help companies further leverage their initial investment of a large format printer. Whether it is through improved flatbed workflow or improved color management for older solvent-based machines, Onyx is providing some protection for its users. These are the kinds of features RIP vendors should be offering.
InfoTrends expects digital print system manufacturers in all of the large format market segments to draw print volume from alternative production processes such as analog copying in the technical market; photo, serigraphy, and lithography in the creative markets; and screen and offset printing in the large format production markets. This is the core assumption in the digital printing market, so while we can discuss the directions of the overall market and extent to which each of the segments of the market are moving, or debate the actual numbers, the trends are clear. Users wanting access to the most useful, cost effective equipment, with fast ROI is one of the assumptions we’ll definitely keep.