We’ve heard lots of doom and gloom regarding the state of the office print market these days (and let’s be frank, the economy in general). While we can’t separate the global pandemic from the current state of affairs, we can remark on the sector’s trendline prior to the crisis.
Each year, Keypoint Intelligence analysts review the annual financial performance of top manufacturers in the global office print market based on public earnings filings (our Office CompleteView clients can access our latest report here). While most Japanese manufacturers saw a significant financial impact from COVID-19 in March (and in some cases, February), most of the fiscal year was immune from the virus’ toll. In addition, we viewed the prior-year results in the context of the past six years of performance.
Our top takeaway is that while the worldwide imaging and print sector has seen its ups and downs during this period, its overall value has declined about 10%. This takes into account the combined imaging and print-related revenue from 11 companies.
| Source: 2019 Vendor Financial Review - A Look at 14 Industry Players |
Reasons for the decline include decreased demand for print, including a shift toward digital business processes; competitive pricing pressures fueled by a very mature market; and document solutions revenue that hasn’t necessarily fulfilled expectations and/or offset declines in traditional hardware, supplies, and service sales.
The growth in imaging and print revenue from 2016 to 2018 was driven by favorable currency exchange rates; new products (e.g., business inkjet technology, document software solutions), mergers, and acquisitions; and HP’s success in 2018—boosted by revenue growth in strategic areas like A3, MPS, and Instant Ink.
But unrelenting industry headwinds, an economic slowdown in China and Europe, as well as the initial impact of COVID-19 coalesced to keep the market from expanding into 2019. In fact, from fiscal years 2018 to 2019, global imaging and print-related revenue decreased about 4%. Some of the COVID-19 impact resulted from closures of business, while supply chain challenges were another factor.
Even if a coronavirus vaccine was to come about tomorrow, enough people could get vaccinated right away, and offices were back up and running as normal days later, there’s little evidence to suggest the industry would return to growth in the year ahead.
Yet that does not mean growth is not possible. Print, documents, and information are certainly changing shape as technology and habits evolve. But given the R&D, manufacturing, and marketing capabilities of the major document technology manufacturers, they can play a powerful role in:
If they can capitalize on the uncertainty of office-based working as well as the ubiquity of online and cloud communication, even better. This is undeniably easier said than done, but we have faith that our industry will come up with some important answers in the months ahead.