Kyocera issues price war warning
Vendor claims poor performing printer market may affect prices of consumables
Printing and imaging vendor Kyocera has claimed that the industry is on the verge of a consumables price war.
The
warning comes on the back of last month’s announcement by Lexmark that
it is closing its inkjet cartridge manufacturing facility at Rosyth in
Scotland, resulting in the loss of 700 jobs.
Tracey Rawling Church,
head of marketing at Kyocera, said a poor performing printer market may
affect the pricing of consumables.
“Driven by the need to increase
margins on consumables to cover losses sustained on hardware sales, the
only option remaining for many companies with this business model is to
strip the costs out of consumables production,” she said.
Rawling
Church added that research from analyst Context last year had
discovered that printer revenues had fallen by 10.1 per cent year on
year, despite unit sales increasing by 8.5 per cent, and that the
consumables market could mirror the price war seen in hard
“Vendors
will begin competing on consumables price, and customers are looking at
lower-cost alternatives such as compatible cartridges and refills,”
Rawling Church said.
“This leave some firms in the position of
making a loss on hardware and no revenue on consumables. It’s tempting
for these companies to begin competing on consumables price.”
Jason
Harcourt, senior analyst at Context, said: “The UK printer industry
appears to be in a state of collapse, and sales have been disastrous.
But I see no reason for consumables pricing to drop. Vendors might
bolster revenues by keeping prices high.”
Harcourt added that the
consumables market has been the “cash cow” of the printer industry in
the past, and offices still need consumables products. This will ensure
the market remains steady in 2006.