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2007 Wide Format Graphics Market

Hardware, Media, and Ink Revenues Are Growing

By Liz Ziepniewski Logue, I.T. Strategies

The wide format graphics market generated total manufacturer revenues at the retail level for hardware, media, and ink of $8.9 billion in 2006 and is expected to generate manufacturer revenues of $11.9 billion in 2011, a CAGR of 6%. The market is becoming increasingly competitive as new product categories, such as UV flatbed and roll to roll, compete with aqueous and aggressive solvent inkjet printers for PFP volume and dollars.

Wide format inkjet graphics hardware revenues will grow from $1.7 billion in 2006 to $2.2 billion in 2011, a CAGR of 6%. However, as a percent of total manufacturers’ revenues, hardware revenue will shrink due to growth in media percentage as users move to more expensive media such as fine art papers, canvas, fabrics, and rigid substrates.

Wide format inkjet media revenues will grow from $3.7 billion in 2006 to $5.2 billion in 2011, a CAGR of 7%. In terms of market revenues, media revenues will increase from 41% in 2006 to 43% in 2011 driven by the increasing use of more expensive media such as vinyl, fabric, and canvas, as well as the increasing hardware installed base generating more output. The variety of inkjet printers on the market today, including aqueous, solvent, and UV-curable, means that media choices continue to expand. They now include such varied substrates as canvas, vinyl, fabric, glass, wood, in fact almost anything you want to print on. We expect that media choices will continue to expand, especially as additional types of UV-curable inkjet inks enter the market.

Wide format inkjet ink revenues will grow from $3.6 billion in 2006 to $4.6 billion in 2011, a CAGR of 5% driven by the increasing installed base of printers. However, as a percent of total manufacturers’ revenues, ink revenue will decrease because of the shift in the market from more expensive aqueous inks to lower cost solvent and UV curable inks.

2007 Forecast Drivers and Trends

External Drivers
The wide format graphics market is in part a sub sector of the larger display graphics market which includes POP signage, outdoor signage, tradeshow graphics, banners, and other types of large graphics. The display graphics market worldwide has a retail value of output estimated at around $100 billion. This comprises output from both analog and digital print technologies. Analog technology—screen, offset, flexo, and gravure—represents about 70% of the total $100 billion; screen printing makes up about half of the market. Digital technologies, primarily inkjet, but also electrophotography and thermal transfer, represent about 30%.

The wide format inkjet graphics market continues to grow both incrementally—very short runs not done previously, as well as at the expense of screen printing. For display graphics, digital offers better quality, offers images not possible with screen printing such as photographic images, and provides increased productivity.

Internal Drivers
Within the forecast some sectors, such as the aqueous in-house sector, the low-level solvent sector, and the UV sectors are growing. The professional aqueous sector is flat as is the Western manufacturers aggressive solvent sector. Although there is some growth in the Chinese, Korean, and Taiwanese manufacturer section, most of the growth is limited to within China, Asia, and developing countries.

Aqueous In-house Sector
The aqueous sector is segmented into professional print-for-pay (PFP) and in-house. In the professional sector, which is further divided by size into 24-36-inch and greater than 36-inch is for the most part, a replacement market. AMPV continues to decline due to continued competition from low end solvent printers used for both indoor and outdoor applications and UV inkjet printers used in POP applications that in the past were printed on aqueous inkjet printers and then laminated onto rigid substrates.

However, the in-house sector is growing as corporations such as advertising and design agencies, universities, hospitals, and manufacturing companies continue to purchase wide format inkjet printers—primarily aqueous—for internal use in environments where a solvent or UV inkjet printers would not be acceptable. Growth is also driven by photographers and artists who continue to buy aqueous inkjet printers to output photographs and fine art.

Low-End Solvent Printers
Low-end solvent printers have provided an economical way to enter the market for many first time purchasers that need to print outdoor applications. I.T. surveys show that these low-end solvent printers are used for both outdoor and indoor applications and have for the most part halted the growth of high-end aqueous printers in PFP applications. They have also impacted aggressive solvent printers to some extent by bringing in-house work that in the past was outsourced to a PFP shop with a high-end solvent printer.

The high-end aggressive solvent sector is showing flat sales over the forecast period. This is due to UV printers especially UV roll-to-roll printers which are perceived to offer a more environmentally friendly solution than solvent.

UV Printers
UV printers, which entered the market a few years ago in a flatbed-only configuration, are now available as roll-to-roll and hybrids. For rigid applications, flatbed UV printers offer productivity increase by being able to print directly onto rigid substrates without having to mount and laminate. Hybrid UV printers give print shops the ability to print both rigid and flexible substrates. I.T. Strategies end user research shows that companies with hybrid UV printers use both formats. The newer roll-to-roll UV printers have been designed specifically to print on flexible substrates, unlike hybrids which were developed to print on rigid substrates and flexible substrates were secondary. I.T. Strategies expects that UV printers in both flatbed and roll-to-roll configurations will pose a challenge to high-end aggressive solvent printers as well as screen printers. UV inkjet printers are also perceived to be more environmentally friendly than solvent inkjet and screen printers and these green issues are expected to continue to put pressure on solvent inks.

Total Revenue Comparison by Type of Printer
As depicted below, in terms of total revenues, the professional aqueous sector—44- and 60-inch—continues to be an important revenue generator despite relatively flat unit sales. The low-level solvent sector also continues as a significant revenue generator as smaller shops buy these printers for both indoor and outdoor applications. Note the growth of all UV sectors which now include flatbed and roll-to-roll products.

Total Revenue Forecast Comparison by Print Segment
In 2006, aqueous printers which have made up more than half of total market revenues since the mid 1990s, now make up 44 % of total market revenues and this share is expected to drop to 35 percent by 2011. UV ink jet printers, both flatbed and roll to roll, are expected to increase from 22% of total market revenues—$903 million—in 2006 to 22%—$2.7 billion—by 2011, growing at a CAGR of 23%.

Aqueous Inkjet Printers: Revenue & Installed Base
In total, wide format aqueous inkjet printers will generate hardware, media, and ink revenues of $3.9 billion in 2006, growing slightly to $4.2 billion by 2011, a CAGR of 1%. In 2006, the largest aqueous sector is professional printers greater than 36 inches, generating 2006 revenues of $2.8 billion but declining to $2.7 billion in 2011, reflecting lowered AMPV due to competition from low-end solvent and flatbed inkjet printers. Revenues in the in-house sector are expected to grow from $904 million in 2006 to $1.3 billion in 2011, a CAGR of 7% as more companies such as advertising agencies and establishments such as universities and hospitals purchase wide format inkjet printers for internal use for presentations and signage.

Solvent Printers: Revenue & Installed Base
In total, solvent printers will generate hardware, media, and ink revenues of $4 billion in 2006 growing to $5.1 billion by 2011, a CAGR of 5%. Throughout the forecast period the largest share of revenue will come from printers from Western manufacturers—both low level solvent and aggressive solvent—with revenues of $3.3 billion in 2006, growing to $4.2 billion by 2011. Within the Western OEM segment, the largest revenue producer continues to be low-level solvent printers. This segment will grow from total revenues of $2.2 billion in 2006 to $2.9 billion in 2011, a CAGR of 6%. Western OEMs aggressive solvent segment is growing slightly reflecting the increasing competition from UV flatbed and roll-to-roll printers.

Total revenues from Chinese/Korean/Taiwanese manufactured solvent printers will grow from $750 million in 2006 to just over $1 billion in 2011. In this area, the largest segment is export sales with revenues of $464 million in 2006 and growing to $718 million by 2011, a CAGR of 9%. For the most part, these manufacturers have had little success penetrating established markets North America and Europe and most sales are in Asia and developing countries.

UV Inkjet Printers: Revenue
In total, UV inkjet printers will generate hardware, media, and ink revenues of $930 million in 2006 growing to $2.7 billion by 2011, a CAGR of 23%. In this year’s forecast, the UV section has been segmented into flatbed, including hybrids, and roll-to-roll UV inkjet printers. UV inkjet printers offer productivity enhancements over solvent and aqueous inkjet printers. I.T. Strategies end user surveys indicate that UV inkjet printers in both flatbed and roll-to-roll formats are being purchased for these productivity enhancements as well as the new opportunities they offer print-for-pay shops in terms of new products that can be printed and new customers that can be targeted.

Over the forecast period, revenues from flatbed UV printers grow from just under $800 million to just over $2 billion. Revenue from low-end flatbed UV printers grows from $300 million in 2006 to about $1 billion by 2011, a CAGR of 28%. Revenue from high-end UV flatbed printers grows at a 15% CAGR, from $494 million in 2001 to $1 billion by 2011. In total revenues from roll-to-roll UV inkjet printers grows from $135 million in 2006 to $600 million by 2011. The majority of these revenues come from high-end roll-to-roll UV inkjet printers which will grow from $121 million in 2006 to $563 million in 2011, a CAGR of 36%.

Hardware by Type of Printer: Hardware Revenues
Hardware revenues from wide format inkjet printers are expected to increase from $1.7 billion in 2006 to $2.2 billion in 2011, a CAGR of 6%. Over the forecast period, the strongest growth area for hardware revenues is UV printers which are expected to grow from revenues of almost $400 million in 2006 to $854 million by 2011, a CAGR of 17% reflecting the productivity gains they offer. The declining wide format aqueous printer revenues reflect the continually decreasing price of these types of wide format inkjet printers. It should be pointed out that within the wide format aqueous sector, the in-house sector also shows slight hardware revenue growth from $228 million in 2006 to $257 million in 2011, a CAGR of 2%.

Media by Type of Printer: Media Revenues
In total, worldwide total media revenues from wide format inkjet printers were $3.6 billion in 2006 and are forecast to grow to $4.6 billion in 2011, a CAGR of 7%. Overall media revenues are driven by the continued migration towards more expensive, specialty media such as vinyl, fabric, canvas, and rigid substrates used in flatbed UV inkjet printers.

Aqueous printers made up about half total media revenues in 2006 and are expected to decrease to 48% by 2011, impacted by both low-level solvent and UV flatbed inkjet printers.

Media by Type of Printer: Media Square Feet
In terms of square feet, the total wide format graphics market produced 15.2 billion square feet of output in 2006 and is forecast to grow to 24.3 billion square feet by 2011, a CAGR of 10%. Solvent printers in 2006 generated almost 11 billion square feet—more than 70% of the total output—in 2006 and is expected to increase to 17.5 billion square feet by 2011, a CAGR of 10%.

The largest growth in output is UV inkjet printers which are expected to grow at a CAGR of 30%, from 775 million square feet in 2006 to almost 3 billion square feet by 2011.

Ink by Type of Printer:Ink Revenue
In 2006, total wide format graphics inkjet ink revenues were $3.6 billion and are forecast to grow to $4.6 billion by 2011, a CAGR of 5%. Aqueous printers continue to have the largest share of the revenue in 2006, 54% ($1.9 billion) and while continuing to grow to $2.2 billion by 2011, will drop in overall market share to 48%, overtaken by solvent inks, especially low-level solvent, which will increase from $1.5 billion (42%) in 2006 to $2.0 billion (448%) by 2011, a CAGR of 6%. UV inkjet inks will grow from $152 million in 2006 to $435 million by 2011, a CAGR of 23%. The decreasing overall percentage of aqueous inks reflects the shift in the market away from these expensive inks to less expensive solvent and UV- curable inks.

Ink by Type of Printer: Ink Liters
In 2006, wide format inkjet printers consumed 28 million liters of ink. This is forecast to increase to 48 million liters of ink by 2011, a CAGR of 11%. Throughout the forecast period, solvent printers will consume the most ink, increasing from 21 million liters to 38 million liters. Some vendors of UV printers claim that UV printers use less ink than solvent printers when printing the same image. Their claim is that with solvent inks, almost 50% of the ink is evaporated, but with UV-curable inks, close to 100% of the ink is cured, indicating that producing the image requires fewer liters of UV-curable ink than solvent.

Liz Ziepniewski Logue is a consultant with I.T. Strategies, specializing in emerging applications for digital color printing technologies. She has done extensive research in industrial markets (packaging, labels, wallcoverings etc), wide format applications (point-of-purchase, outdoor signage etc) and Color Electrophography (desktop, workgroup, enterprise, vertical markets etc). Ziepniewski speaks regularly at industry conferences, is a co-editor of Spectrum publication, and frequently contributes to industry publications. Ziepniewski has been in the industry for over 5 years.

Aug2007, Digital Output

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