By Mark Hanley
Each year, analyst firm I.T. Strategies statistically looks at the progress vendors are making in wide format. The news is we are still feeding a growing demand for digital display output, which is pretty nice to be able to say after over 20 years of this market. Let us remind the reader, this market has gone from nothing to a value for retail printed display graphics of over $38B worldwide.
At the risk of repetition, I.T. Strategies would also like to point out that digital display graphics paint has existed and continues to do so as a separate channel and product in a different economic universe entirely from analog printed display graphics, dominated by super-efficient, super-fast sheet offset presses. Screenprinting has not been the major analog factor for many years now, and no analog technology is really in competition to inkjet—which has created its own market.
As in years past, we share our vision for the future of wide format as well as the current state of the industry in regards to the various ink technologies.
Fast, Faster, Fastest
The vendors in most sub-sectors of inkjet actually sold significantly fewer systems in 2013 than in 2012. While this sounds like a sign of maturity, it is misleading because printed area and revenues are still rising. What is happening is that vendors are selling fewer but more efficient systems, allowing users to be much more efficient in their production economics. This is what is supposed to happen.
Another factor in wide format—and it is common to many other digital production print markets as well—is that fast response is the single most important value proposition of digital print. That suggests that the constant push by users for faster systems is more related to the need to get product out at short notice than it is to large overall annual demand. That is also why to this day the capacity utilization of many wide format systems averaged over a year is still low—well below 50 percent.
An ideal example of efficiency is found in eco-solvent and latex. These markets have been at the heart of growth in the past ten years because they are able to offer a universal technology—capable of printing internal and outdoor graphics in one system—at a low cost of acquisition. But just as some observers saw a tapering off of the long growth curve, some vendors have so far increased productivity that they have effectively extended market growth.
One secret of many of the wide format markets is that users may ask for high quality, but print providers most often print at the highest speed. As a result they are good at working out the ration of acquisition price to throughput. Not every vendor appeals with equal fervor to this behavior.
A separate UV sector developed over the last few years at the very high end, involving fixed array or near fixed array systems, which have very high throughputs at 5,000 square feet per hour and over. This sector has its own growth rate, a high average acquisition price level, and to some extent, a separate group of clients. Some of the most important new customers in this space are converters among the largest providers of large sheet offset display graphics.
Such companies are dominant in their own high-volume, low-price world, but they too don’t easily see a future beyond five years given the low margins they survive on. Again, they see digital as a way forward in addition to being a back up to the large volume markets.
Latex is still largely the province only of Hewlett-Packard (HP). To observers such as ourselves we are frankly baffled. I.T. Strategies had expected to see competitive products in particular out of Japan. Why haven’t we seen latex from Canon or Epson? You can make good arguments, but in the end none of them are very strong.
Latex is seen by HP not only—correctly—as a successful technology in wide format, but as an important extension of the capability of aqueous printheads for future markets. Indeed we have seen similar chemistry from Epson in adjacent industrial markets like labels. Latex has a good future, in other words, and it is surprising not to see it more widely available in terms of vendors.
UV markets probably lead in growth among the wide format sub-sectors and we are seeing systems pushing down in the direction of $50,000 now. There still exists that gap between the high-end eco-solvent/latex printers and low-end UV flatbeds between about $35,000 and $90,000. It is hard to tell if a strategic effort is being made to close the gap.
At each side of the gap is a different set of channels in very different numbers, and thus the gap represents for vendors on either side a theoretical opportunity to extend channel reach.
Finally, I.T. Strategies has spoken before of wide format as a gateway to industrial print. Progress has been made by some wide format vendors in getting into markets like printing of three-dimensional surfaces. But this year we are hearing much packaging talk from digital vendors and of the formats required these are close to wide format. For example, corrugated is the top of some people’s lists right now. Wide format is already involved in that as a display medium, if not as a packaging medium.
Mark Hanley, president, I.T. Strategies, has over 20 years of experience in the electronic printing industry. He specializes in identifying new markets for digital color printing technologies. In addition to conducting research and consulting, he travels extensively around the world, facilitating partnerships and strategic alliances between manufacturers in Europe, Japan, and the U.S.
Prior to co-founding I.T. Strategies, Hanley organized the European operations of CAP International, subsequently known as BIS Strategic Decisions. From 1990 to 1992, he was services director at BIS, responsible for the management and growth of electronic hard copy information services in Asia-Pacific, Europe, and North America.
Throughout the article you’ll notice charts that detail worldwide unit sales of specific technologies between 2012 and 2013, in addition to an overall chart comparing aqueous, eco-solvent/latex, aggressive solvent, and UV unit sales.
As Hanley noted, significantly fewer systems were sold in 2013. This solidifies the opinion that more efficient and durable wide format devices are being placed in the market at this time, which eliminates some of the need for constant hardware upgrades.
Speeds and feeds continue to define wide format. Print service providers rely on vendors to offer hardware that helps them meet the tight turnaround demands of customers. New technologies address this concern, while simultaneously attracting non-traditional markets—such as industrial print—and introducing them to wide format printing capabilities.
Stay with Digital Output as we continue reporting on the top trends.
Aug2014, Digital Output