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Desktop Ink Jet Photo Paper Profits Erode
lyra imaging :Although Lyra expects to see ink jet photo paper shipments increase, significant price erosion will negate much of the revenue growth. Lyra anticipates that average snapshot-size photo paper prices will decline by nearly half between 2005 (20 cents per sheet) and 2010 (11 cents per sheet). As a result, photo paper revenue will grow at a CAGR of just 2.6 percent over the forecast period. With revenue growth slowing, smaller vendors may be forced out of the market and the stronger players will vie for market share. While Lyra forecasts shipments of snapshot-size photo paper will exceed letter-size shipments in 2005, retail revenue from snapshot-size photo paper will not exceed revenue from letter-size paper until 2009. This is mainly because snapshot-size sheets are less than half the retail price of letter-size sheets. Also, retail prices for snapshot photo paper will fall more quickly than letter-size photo paper prices.
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