IDC: Slow-Down in Ink-Cartridge Market in Asia-Pacific, but Growth for Toner-Cartridge Market

655 Ink Advantage cartridge

Market-research firm International Data Corporation reports in its latest Quarterly Printer Consumables Tracker that the Asia/Pacific excluding Japan (APeJ) printer-consumable market declined 1.3 percent quarter-on-quarter, and 6.5 percent year-over-year to reach U.S. $1,551.72 million in fourth-quarter 2015. Out of the total consumables market, third-party vendors (non-OEM vendors, selling only supplies but not printers) contribute approximately U.S. $330 million, which is approximately 21 percent of the total value.

IDC says the drop in revenue in the APeJ market was due to the decline in the shipment of ink cartridges, which recorded an estimated 5.1  revenue decline quarter-on-quarter, while the laser toner market posted a 5.3 percent quarter-on-quarter revenue growth. Among the major classifications, the originals market (OEM vendors, selling printers as well as supplies) recorded the biggest drop in revenue, a decline of U.S. $15 million from the previous quarter.

“There have been significant developments in the inkjet market especially in 2H 2015, with major OEM vendors launching inkjet hardcopy peripherals (HCPs) which offer ink-tanks that have extremely high page yield at very low cost of print per page (CPP),” commented Jeremy Soo, market analyst for IPDS Research at IDC Asia/Pacific.

IDC says the OEM market is currently undergoing a transition in the business model wherein printer supplies are no longer the main source for profit, as part of the profit margins are now split between printer consumables and inkjet hardcopy peripherals (HCPs). This has affected the revenue of originals as vendors reduce the cost of printer consumables and increase prices of HCPs.

“PRC and ASEAN region are expected to be most affected by the change as these countries contribute approximately 60 percent of the total ink cartridge shipments in APeJ,” said Soo.

IDC believes that with all the major vendors such as Brother, Canon, Epson, and HP now offering ink-tank HCPs with very competitive prices for printer consumables, the third-party market is expected to experience a decline in market share as OEMs regain the upper hand.

However, it says there are growth opportunities for third-party vendors in the laser toner market where there are higher margins. With declining margins in the ink-cartridge market, there has already been a shift in focus by the third-party brands into the laser toner market with many new third-party brands emerging within Asia/Pacific.

With the global economic slowdown from the deceleration in growth in China, coupled with impacts from the decline in oil prices, IDC says the competitive landscape in the laser toner market will intensify even further with third-party products becoming more viable, especially in developing economies in the region. Third-party laser toners are beginning to gain acceptance in government and corporate sectors as third-party vendors begin to improve on product quality and after sales break-fix support services to contractual clients.

On an overall perspective, IDC believes the ink-cartridge market will be dominated by OEMs with declining competition from third-party vendors while the third-party vendors will find opportunities in the laser-toner market.

For more information about this research, contact Shari Jane Jansen at sjansen@idc.com.

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