Analysis: Printer Markets Shrunk But Revenues Growing in Asia

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Last updated at: (Beijing Time) Tuesday, November 20, 2001

Analysis: Printer Markets Shrunk But Revenues Growing in Asia

Asia's printer consumables market has good potential of bringing in the much needed revenues to printer vendors amid the sharp slowdown in Asia-Pacific's printer market, experts from the International Data Corporation (IDC) revealed Tuesday.

The regional printer market had seen a sharp dive in growth from 11.5 percent in the third quarter of 2000 to two percent in the same quarter of 2001, the latest IDC statistics showed.

According to the preliminary results in IDC's Quarterly PrinterTracker and Semi-annual Printer Consumables Tracker, total printervolumes reached 3.2 million units in the third quarter of 2001, illustrating the weakened demand that resulted from the worsening economic climate and the aftermath of the tragic events of September 11 in the U.S.

China continued to lead the pack in the Asia-Pacific printer market, followed by South Korea and Australia in second and third positions in the third quarter of 200l, respectively.

"Although China was not spared during the recent financial meltdown, the market will prove to be the cash cow in the region to garner 40 percent of the total Asia-Pacific printer volumes in 2002 with its recent accession to the World Trade Organization," said Natasha Tan, manager of peripherals research for IDC Asia-Pacific, a leading global market intelligence and advisory firm.

In the printer consumables market, competition is heating up. The latest study conducted by IDC in the first half of 2001 shows that the Asia-Pacific printer consumables market has expanded to post another shipment record.

Total printer consumable volumes reached 76.7 million units, surpassing the second half of 2000 by 7.4 percent and year-on-yearby more than 20 percent, Tan explained. "Print on demand has proven to be a revenue spinner with the advent of the email and the Internet."

While the ratio of printer to printer consumables was 1:4.7 in 2000, IDC expects the flood of network laser printers to the government and corporate sectors over the past two years to trigger an avalanche of laser toner purchases, hence bringing the ratio down to 1:4.4 by 2001.

Notwithstanding the fierce competition in the Asia-Pacific printer market, HP enjoyed tremendous market share, followed by Epson and Canon in the first six months of 2001. This popularity has drawn many compatible printer cartridge vendors to offer theseusers with cheaper similar products.

During the first six months of 2001, compatible volumes claimed38.4 percent of the total printer cartridge shipments from the topthree printer vendors in Asia-Pacific. The ink cartridge segment witnessed a staggering 16.4 percent sequential growth in compatible volumes in the region, the highest among the product categories.

As printer vendors resort to doling out freebies in a bid to invigorate printer cartridge purchase, many compatible vendors offer a series of value-added services ranging from extended printer warranty to free printer maintenance service to draw usersto its fold.

While a growing number of compatible vendors look set to further expand into the Asia-Pacific printer consumables market, experts on printer market here believed this market entry is not without obstacles.

"It may still be early to see how compatible vendors would respond to the increasing number of printer cartridges that are embedded with smart chips," Tan declared.

Apart from investing in advanced technologies to help deter users from opting for non-original brands of printer cartridges, the experts believed printer vendors will focus on the color cartridge market as color printers are expected to register a yearon year growth of 11 percent by 2002.

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