Issue #0533/3 - With market signs looking good for printer vendors, Dell claims major milestone is reached.
Reports and shipment figures released over the last few weeks have shown a trend that may have encouraging implications for the printer industry.
Apart from the fact that IT spend has been reported to be on the increase for a number of months, research firms Gartner and IDC both report levels of PC sales that are higher than expected. Indeed, IDC revised its forecast for UK shipments for the year to match the Gartner forecast of just over 17% growth in the 12-month period (increasing it from around 13%).
Any increase in PC sales is a good sign for the printer industry. Although many of those PCs are replacement units, meaning a relatively small number of new users, what it does mean is that companies are prepared to spend money on high tech equipment and on personal computing in particular.
In turn, because every PC is an eager and willing platform for hard copy production, this means that new printers are required to handle that demand. Again, many new printers will be replacement units but, with so many of today’s printer models offering significantly higher levels of functionality or quality, it is easy for organisations to justify the replacement of older models if funds are available.
We can cite the rise in multifunctionality, single-pass colour laser, and colour itself for that matter, as well as ever reducing purchase costs, as major drivers in this area. Organisations with fleets of printers and copiers that are more than a few years old will be able to benefit dramatically from fleet consolidation, by installing colour multifunction devices as an element in the new fleet – each replacing a number of mono (and colour inkjet) printers to handle both mono and colour hard copy needs.
Two of the major printer IT suppliers with significant printer interests are due to release quarterly financials in the next few weeks, Dell and Hewlett-Packard, so we should soon see some indications that this is reality.
Dell released figures in mid-September relating to its growth in printer sales and the installed base it is developing that show high levels of growth for the new printer vendor. Starting off with a non—existent installed base does, of course, mean that percentage growth rates are extremely high and irrelevant. However, for Dell to have reached an installed base of 10 million printers in 40 countries in a period of 27 months is indeed impressive.
Indicating that it is now shifting attention specifically to high value AiO and colour machines, Dell must be feeling comfortable that it has succeeded in making the waves and impact that it intended when it entered the market only two-and-a-half years ago.
It is more than significant that the primary growth area for Dell is the laser category where it has romped up through the market share league table in its short time in the market.
Dell now claims to hold second place in the US for A4 colour laser printers with a 17% share. Because it only covers 40 countries at this time, eighth place with a 3% share is all it can manage at a global level.
Also significant is that Dell claims its consumables account for 42% of its branded printer revenue. This compares with well over 50% for other players in the industry and, combined with the rapid sales penetration, is an indication that its policy of driving excess profit out of the consumables market is having more of an effect than we might originally have given credit for.
Dell is particularly targeting colour laser technology at SMBs, a group that is particularly keen to maximise cost efficiency and minimise Total Cost of Printing. Here, the very low CPP of a printer like the 5100cn is especially attractive.
This is bad news for anyone who did not take Dell seriously when it launched the first of its printers in the spring of 2003. None of Dell’s competitors in the printer industry can afford to be complacent.
With printers now taking a much more prominent position on the Dell web site, and 95% of Dell’s sales force selling printer products, the sales trend can only continue in an upwards direction as long as the company keeps its feet on the ground and keeps in close touch with its customer’s needs.
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