The OEM’s well-publicised struggles over the past year have been amplified by the shrinking printer market, according to Phys.org.
The site states that the company, which has recently reported poor Q4 2012 results amid a court case against acquisition Autonomy, still insists that printers, ink and other products “will remain essential for businesses”, but that the facts of the matter suggest that “people aren’t printing as much as they used to”, with the trend predicted to increase and “further threaten HP’s bottom line”.
Federico De Silva, Principal Analyst at market researcher Gartner, stated that it is in the next few years that the OEM is expected to really struggle: “They are in trouble over the long term. It’s a big business, to be sure, but it’s not growing. It’s in a slow decline and we don’t see it coming back.”
Gartner predicts that global sales of printers and copiers will fall from the $50 billion (€38 billion) seen in 2010 to $47.8 billion (€36.5 billion) in 2014, which backs up statistics from International Data that suggested global printer shipments had dropped 26 percent in Q3 2012. International Data’s justifications for the results were the “soured economy, reduced business purchases” and “the shift in consumer spending to other products like mobile devices and tablets”.
Added to this, HP’s sales of printers and consumables, which enjoy a 40 percent market share worldwide, have fallen from $30 billion (€22.9 billion) in 2008 to $24.5 billion (€24.7 billion) in 2012, with the sector originally representing 31 percent of its total revenue in 2003 now signifying only 20 percent.
Phys.org interviewed a number of business people for their thoughts on printing, with Ai-Lien Le, an early intervention specialist for developmentally challenged children in San Jose, California, noting that “when I go into meetings, I have to print out documents to the participants”, whilst Reno, Nevada-based sales engineer James Jeffery told the site that “in business, my printing is down over 90 percent. It’s just becoming antiquated”.
The site notes that such messages are “just what HP doesn’t want to hear”, despite the company’s Senior Vice President Steve Nigro stating that “printing is not going away”. The OEM is attempting to diversify and claims that the printer market for businesses and emerging markets is growing, with a new focus on these market areas.
However, whilst Pacific Crest Securities Analyst Brent Bracelin noted that this area of HP’s business is “still generating a good bit of profitability”, Technology Business Research’s Jack Narcotta states that printing is undergoing “wholesale change” due to Cloud storage, technological innovations and environmental considerations, with De Silva adding that workers “on average print half as many documents today as they did in 2005.”.
One final note came from Discern’s Analyst Cindy Shaw, who noted that “Grandma and Grandpa may still prefer hard copies, but over time, Grandmas and Grandpas will have grown up in the digital age”.