Printing and Publishing
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The impact of home/office printing on the print market PDF Print E-mail
Written by Sean Smyth, Independent Print Consultant   
Hewlett-Packard featured in a couple of significant announcements earlier this summer They launched the LaserJet 2550, their first colour laser printer to retail under US$500 - a new price point in the US (street price of £360-400 in the UK). The other was that they sold over a million printers each week over the period - a new record volume. HP is the world's market-leading printer manufacturer, with a share of over 60 per cent of the US market and some 45 per cent of global desktop inkjet and laser printers. HP's printing and imaging division had revenues of $6.1 billion (making $953 million in operating earnings) for the quarter ending in April 2004. Projecting these numbers gives a world market of $55 billion for machines and consumables. This huge figure is for home and office machines and represents a huge potential volume of printing. Some of this used to be produced commercially.

So, when was the last time you pinched (I mean took home with your boss's approval) a couple of reams of paper from the office? What did you use it for? Helping your offspring prepare homework for the teacher craving a bit more marking; paper aeroplanes covered in doodles; your CV; or writing a list, perhaps. Maybe you printed out the details of a holiday offer from the Web, specifications of cars, the confirmation of an order placed over the Web, research on a particular topic that used to come from a visit to the library, perhaps. You are not alone!

Today, when you are in the office and want information on a product you print out the brochure immediately rather than waiting for a potential supplier to send a printed version of the brochure - items that used to be printed by commercial printing companies, work that has disappeared off the market. The provision of huge quantities of information on-demand and the ability to print a perfectly acceptable-looking document containing the formatting and images in colour on low-cost laser and inkjet machines quickly is impacting on the printing industry. Demand for commercial print is declining in some sectors as users substitute home and office capability for professionally produced products.

In the past there has been a very strong correlation between commercial print sales and GDP, but this has now irrevocably changed. Figure 1 shows this for the US.

Towards the late 1990s the trends in the US started to diverge, with the value of printing lagging behind GDP. Initially commentators noticed this and determined it was a blip; over time this became progressively more pronounced and widespread. There are several reasons; undoubtedly one driver is improvement in cost efficiency of print from the adoption of digital technology and better supply chains. The gap can also be related to office and home Internet usage with end-users having immediate access to the information electronically. As fast access to the Internet in the home and office usage has risen, so printing industry revenues have fallen. This correlates well with the widespread growth in low-cost A4 inkjet and laser colour printers that provide a huge outlet for printed pages. So there are two factors involved:

  • Displacement of print to electronic media;
  • Migration of print to non-production environments.
There is evidence to support the view that the same may be happening in Europe, when the growth of printers and cut-sheet paper sales is examined. Generally the production of documents is moving closer to the end-user. Many business documents, such as proposals, presentations, brochures, training materials, corporate newsletters, on-demand stationery and some invoices are now printed internally by companies. These products are printed on colour devices in the office, incorporating logos and colour backgrounds, directly on plain cut sheets rather than using pre-printed stationery and forms.

Many of these applications would have previously been outsourced to printers. New technology, particularly use of pre-formatted templates and high-quality colour printers, allows professional-looking results to be produced without need for print companies and their specialist skills. However, work that has sophisticated finishing or specialist substrate requirements will continue to be outsourced, reinforcing the view that these processes, and the ability to handle the unusual, will be key USPs for commercial printers.

Virtually all documents today are created and available electronically to somebody. As a result, printing has become an output option rather than an assumed end result. This has an impact on most printing, no matter whether in a print shop, copy centre or in-house facility. This is a fundamental change and has knock-on implications for the printing and communications sector.Pira's market research shows the progression of relative shares of the different major printing technologies. The next five years will see significant increase in the market share of digital printing, commercially as well as in the commercial and home office. Other sources agree that in terms of volume, all forecasts show an inexorable rise. This growth emanates from end-user demands for short runs and instant gratification, and the developing technology - both in terms of printing capabilities and the profiling of target individuals.

Table 1 covers commercial print and packaging, showing that this leakage of home/office printing is some e4.7 billion across the EU, forecast to grow to more than e5.5 billion by 2007. The devices being used to print this volume vary from the industrial strength machines from Xerox (there are many thousands of mono Docutechs and colour 2000/6000 devices in offices and corporates), HP-Indigo, Nexpress and Xeikon; through powerful workgroup printers; multi-functional devices down to desktop machines and low-cost home machines, often provided as free peripherals with the price of a home computer. These are black and white and colour devices, a market growing by more than two million units each week.

One significant application on many home PCs is printing very high-quality photo-realistic prints from their digital cameras. Using photograde paper and the calibration routines built into the printer drivers, home users are virtually able to reproduce the quality achievable at professional photolabs and silver-based film. When consumers see this capability they are encouraged to print other materials, for in-house use and also for clients and potential customers. The activities of the industry are changing with the advent of digital print solutions, with quantities of what used to be produced by commercial or inplant print operations being produced in the office or shop counter on plain paper using inkjet and laser printers. Two varying examples are below.

Printers of a nervous disposition, please look away now

The trend for home and office printing is being further fuelled by suppliers of software and printers, providing help for 'amateur' users to prepare professional-looking documents. LexMark is one, offering Optra Forms - software designed to eliminate pre-printed forms. LexMark points out that, "Pre-printed forms are not only expensive to produce, store and handle, they can also become obsolete overnight... Lexmark Optra Forms eliminates the need to buy pre-printed forms and cuts your storage and handling costs as well by letting you create your own forms and print them as needed." The form is stored at the printer, data is sent from applications (including SAP) to be merged at the printer. The Optra Forms solution has five utilities:

  • Design - to create new forms or replicas of existing printed forms;
  • DataMap - to specify variable data input;
  • Style - to set material and download to the printer;
  • Manager - to manage and distribute forms across multiple printers;
  • Webfiller - to fill in and print forms from a Web browser.

Hewlett-Packard uses its website to promote the use of their machines and also to generate volume and demand printing: "Cost-conscious professionals are creating sophisticated promotional materials in-house - even without in-house graphics experts or a big budget. HP colour printers and various software packages on the market today let you realise the many advantages of robust, flexible, in-house publishing.

"The company also announced joint efforts with Adobe, Apple and Microsoft to offer small and midsize businesses tools for creating marketing materials. "Digital photography is widespread, imaging devices are affordable, and technology now can provide rich, powerful colour at prices customers can afford," said Vyomesh Joshi, Executive Vice President of HP's imaging and printing group.

Larry Jamieson, an analyst at research firm Lyra Research, said HP has targeted a fertile field and that the company was wise to team up with software partners to make colour printing more efficient for customers. "People don't want to lose time... trying to create documents," he said. HP provides step-by-step 'how to' guides for many products such as: brochures, newsletters and fliers, presentation handouts, postcards, business cards, calendars, fax cover sheets, letterheads, memos sheets, various internal forms, as well as simple direct marketing projects. They provide templates for use in Word and Microsoft Publisher together with libraries of clip art and logos with instructions on how to incorporate samples created by the user. Spindle Forms is one of many suppliers of software to create electronic forms as an add-on to Sage accounting software. They offer the means for Sage users to personalise the printing of reports (invoices, remittance advice, statements, payment slips etc.) directly onto plain paper, saving money on pre-printed forms and stationery.

Bemused by the choice, users have more than 1,000 inkjet and laser printers available on the market. A list of colour printers from leading manufacturers for the home or office is provided in Table 2 in no particular order. There are many more, this is no recommendation but an indication of the range of prices, speeds and functions available. Many have specialist finishing included or available as options and are definitely not like for like.

The price range from under £100 to almost £18,000 demonstrates the range of capabilities of devices, from simple single-sided printers to devices capable of duplexing, scanning, copying and faxing. The maximum monthly volumes vary from a few hundred to 100,000. With the right choice of materials and settings these machines can produce extremely high-quality output, for almost any budget. Various productivity and functional add-ons are available to the base models allowing hole punching, stapling and simple booklet-making to be incorporated, using the printer as part of a document system.
 
Next five years, more of the same?

Vendors will develop low-cost multi-function devices capable of printing, copying and scanning although fax capability will start to drop as an extra function. (Hopefully they will shed the silly names, particularly "mopier".) Manufacturers are looking at the commercial impact of their equipment, developing imaging systems and integration technologies with an emphasis on integrating multi-functional devices into business processes and automating complex publishing workflows.

The printer market is very well segmented, with manufacturers continually updating and launching new models. Inkjet currently offers the highest imaging quality and will be developed particularly for photographic imaging; for home and office, lower-cost devices inkjet will continue to dominate in terms of numbers. They are being attacked by laser printers, offering high speed and quality with lower overall cost of ownership. Laser toners will improve in quality with smaller, more uniform spherical particle size distribution and improved electrostatic characteristics allowing easier mixing to provide spot colours for particular applications. Within five years there will be some liquid electrophotographic (liquid toner-based systems, using technology similar to HP-Indigo imaging) penetration into the workgroup market from HP.

Expect to see the machines continuing to improve in quality and speed with reduction in cost, particularly for laser printing over the next few years. It is likely that these devices will incorporate colour management in the next few years, being calibrated automatically with colour look-up tables downloaded from manufacturers' websites, persuading you to use their paper and inks/toners. 
 
 
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