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Large Format Graphics Market

Hardware, Media, and Ink Revenues are Growing

By Patti Williams, I.T. Strategies

The large format graphics market generated total manufacturer revenues (at the retail level for hardware, media, and ink) of $8 billion in 2005 and is expected to generate manufacturer revenues of $11.1 billion in 2010, a CAGR of 7%. The market is becoming increasingly competitive as new product categories, such as eco-solvent and flatbed, compete with aqueous and aggressive solvent inkjet printers for PFP volume and dollars.

I.T. Strategies defines the large format inkjet market as 24 inches and greater. The market is segmented by I.T. Strategies into three primary technology categories—aqueous, solvent, and UV. These segments are further split by type, size, or price.

According to Liz Ziepniewski, senior consultant, I.T. Strategies, "We are continuing to see the impact of low-level solvent printers and UV flatbed printers on the market. Low-level solvent printers continue to grow and facilitate the entry into the market of sign shops which are relatively small companies and have the need for the indoor and outdoor capabilities afforded by the low-level solvent printers. UV flatbed printers give print shops increased productivity by bypassing time-consuming offline mounting. Additionally, many flatbeds have the capability to print on rigid and flexible substrates allowing users to print rigid POP materials as well as larger banners. In the aqueous sector, the corporate market is growing at a CAGR of 8% reflecting the continued adoption of large format inkjet printers within companies such as advertising and design agencies and marketing and PR agencies."

Total Large Format Graphics Revenue
Total large format inkjet market revenues for hardware, media, and chemistry are growing from $8 billion in 2005 to $11.1 billion in 2010, a CAGR of 7%.

Graphics hardware revenues will grow from $1.65 billion in 2005 to $1.7 billion in 2010, a CAGR of 1%. In terms of total market revenues, large format inkjet hardware revenues will decrease from 21% in 2005 to 16% in 2010, driven down by continually declining hardware prices.

Media revenues will grow from $3.1 billion in 2005 to $4.6 billion in 2010, a CAGR of 8%. In terms of market revenues, media revenues will increase from 39% in 2005 to 41% in 2010 driven by the increasing use of high-value specialty media such as vinyl, fabric, and canvas, as well as the increasing hardware installed base generating more output.

Ink revenues will grow from $3.2 billion in 2005 to $4.8 billion in 2010, a CAGR of 9% driven by the increasing installed base of printers. In terms of total market revenue, inkjet ink revenues will grow from 40% of total market revenues in 2005 to 43% in 2010.

Revenue Forecast by Printer Type
Total large format inkjet graphics revenues for hardware, media, and ink are forecast to grow from $8 billion in 2005 to $11.1 billion by 2010, a CAGR of 7%. In 2005, 51% of large format graphics revenues—$4 billion—were generated by aqueous inkjet printers. By 2010, aqueous inkjet printers, with total revenues of $4.2 billion, will decrease to 37% of total market revenues. Solvent printers will increase from 43% of total market revenues—$3.4 billion—in 2005 to 50% of revenues—$5.6 billion—by 2010. UV printers will grow from 6% of total market revenues—$470 million—in 2005 to 12%—$1.4 billion—in 2010.

Aqueous Inkjet Printer Revenue
In total, large format aqueous inkjet printers will generate hardware, media, and ink revenues of $4.1 billion in 2005, growing slightly to $4.2 billion by 2010. In 2005, the largest aqueous sector is professional aqueous printers—44- and 60-inch—generating 2005 revenues of $3 billion but declining to $2.7 billion in 2010, reflecting lowered AMPV due to competition from low end solvent and flatbed inkjet printers. Revenues in the corporate sector are expected to grow from $854 million in 2005 to $1.3 billion in 2010, a CAGR of 8% as more companies such as advertising agencies and establishments such as universities and hospitals purchase printers for internal use.

Solvent Printer Revenue
I
n total, solvent printers will generate hardware, media, and ink revenues of $3.4 billion in 2005 growing to $5.6 billion by 2010, a CAGR of 10%. Throughout the forecast period, the largest share of revenue will come from printers from Western manufacturers with revenues of $2.8 billion in 2005, growing to $4.5 billion in 2010. Within the Western OEM segment, the largest revenue producer will be low-level solvent printers. This segment will grow from total revenues of $1.9 billion in 2005 to $2.9 billion in 2010, a CAGR of 9%. Total revenues from Chinese, Korean, and Taiwanese manufactured solvent printers will grow from just under $600 million 2005 to about $1 billion in 2010. In this area, the largest segment is Export Sales with revenues of $357 million in 2005 and growing to $733 million in 2010, a CAGR of 15%.

UV Inkjet Printer Revenue
In total, UV inkjet printers will generate hardware, media, and ink revenues of $470 million in 2005 growing to $1.4 billion by 2010, a CAGR of 24%. Revenues from low-end flatbed—less than $200,000—printers are forecast to grow from $242 million in 2005 to $1 billion in 2010, a CAGR of 34%. Revenues from high-end flatbed printers—more than $200,000—will grow from $228 million in 2005 to $356 million in 2010, a CAGR of 9%. Currently, most of the UV printers are flatbed printers. UV-curable flatbed printers offer productivity enhancements over roll-to-roll printers. Many of the UV flatbed printers offer the capability to print rigid as well as flexible substrates. This year, we are also seeing the introduction of roll-to-roll UV printers which offer the capability to print on a wide variety of substrates.

Hardware Revenue by Printer Type
Hardware revenues from large format inkjet printers are expected to rise slightly from $1.65 billion in 2005 to $1.7 billion in 2010, a CAGR of 1%. Over the forecast period, the only growth area for hardware revenues is UV printers which will grow from revenues of $260 million in 2005 to $502 million in 2010, a CAGR of 14% reflecting their relative newness on the market as well as the productivity gains they offer. The declining large format aqueous and solvent printer revenues reflect the continually decreasing price of these types of printers. It should be pointed out that within the Large Format Aqueous sector, the Corporate sector also shows hardware revenue growth—from $250 million in 2005 to $276 million in 2010, a CAGR of 2%.

Media Revenue by Printer Type
In total, worldwide total media revenues from large format inkjet printers were $3.1 billion in 2005 and are forecast to grow to $4.6 billion in 2010, a CAGR of 8%. Overall media revenues are driven by the migration toward specialty media such as vinyl, fabric, and canvas. Aqueous printers constituted 53% of total media revenues in 2005 and are expected to decrease to 35% of total media revenues by 2010, impacted by both low-level solvent and UV flatbed inkjet printers.

Ink Revenue by Printer Type
In 2005, total large format graphics inkjet ink revenues were $3.2 billion and are expected to grow to $4.8 billion by 2010, a CAGR of 8%. Aqueous printers have the largest share of the revenue in 2005, $1.9 billion, and while continuing to grow to $2.1 billion by 2010, will drop in overall market share to 44%, overtaken by solvent inks, especially low-level solvent.

Jul2006, Digital Output

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