HOME PHOTO PRINTING BOOM EXPECTED

[Anonymous]

Home photo printing boom expected
Digital prints and lower ink costs will help drive sales of inkjet printers
Inkjet printer makers will continue to benefit from rising ink sales as demand for photo-quality prints increases along with digital camera sales, Nomura Securities predicts.
“We think the market has strong growth potential. We look for home photo processing to spread in line with improvements in the quality and durability of photos printed with inkjet printers and decreases in printing costs,” said Nomura analyst, Tetsuya Wadaki. Nomura is Japan’s largest brokerage.
Digital cameras are giving increasing numbers of people the chance to print out their own snaps at home. About 76 million digital cameras will be sold globally in 2005, and consumers will take home a further 85.5 million in 2006, predicts Taiwan’s Market Intelligence Center, a technology research organisation.
Inkjet printers and multi-function inkjet printers increased their share of the global printer market from 75 per cent in 2003 to approximately 84 per cent last year, according to US-based Lyra Research.
“To date, home photo printing has not spread as rapidly as the use of digital cameras due to the lack of substantial price benefits versus photo labs and concerns about quality,” Wadaki said.
But as media costs fall and consumers become more familiar with the technology, these concerns are expected to fade. Wadaki added that convenience and privacy will also help sell consumers on home photo printing.|
“Photo printing uses almost exclusively high-margin ink made by the printer maker, and the consumption volume of high priced colour ink increases with the number of photos printed. As such, the spread of the home photo printing market should improve profitability at inkjet printer makers,” Wadaki predicted.
Nomura names Canon and Seiko Epson, two of the world’s top four printer vendors, among Japanese companies expected to see record printing division profits from the predicted boom in home photo printing. The other major inkjet sellers, US-based market leader Hewlett-Packard and Lexmark, are also likely to benefit.
However, the companies will face some competition from cut-price third-party ink cartridge makers, despite the fact that unofficial ink supplies are sometimes criticised for quality and durability issues. This could exert further downwards pressure on ink prices.
Only a little over 60 per cent of Epson and Canon printer cartridges sold in 2005 were actually made by the two companies, Lyra estimates. The rest were mainly third-party copies sold more cheaply than the ‘genuine’ cartridges.
Other manufacturers like HP, which integrate the print head into the cartridge, are able to keep their cartridge market share over 70 per cent because legal and technical restrictions make copying more difficult.
Although the ink cartridge market will expand from approximately 1.15 billion units in 2004 to 1.98 billion in 2009, the printer vendors’ share of the market will actually shrink from 68.2 per cent to 61 per cent in the face of increased competition from third party manufacturers, Lyra forecasts.

[Author]

December 26, 2005 at 9:40 AM