Price erosion and an overcrowding of the printer market - particularly at the lower end - will result in industry consolidation over the next 12 months. According to experts, some vendors will leave the Australian market or give up certain areas to their competitors and concentrate on segments that play to their strengths.
"Certain segments in the printer market are definitely overcrowded and some vendors might decrease their focus, if not leave it entirely," IDC senior peripherals analyst, Rishi Ghai, said. "They haven't done so to date because it's been a question of volume and, at the end of the day, you want your presence out there in the market."
Ghai said that while many vendors hadn't wanted to be dragged into price competition over the past couple of years, it had been the only way to avoid losing market share.
HP vice-president and general manager of its imaging and printing group, Christoph Schell, had no doubt that there will soon be a decline in vendor numbers.
"It's very concentrated competition - particularly at the low-end of the market - and pricing will hit rock-bottom by Christmas," he said. "There are probably 14 or 15 brands in the low-end inkjet market right now and not all of them are in this for strategic long-term. I'm sure a couple of vendors will pull out." Kyocera managing director, David Finn, agreed with Schell's assessment.
"Some companies that don't have printers as their main focus might take another strategy because there's further price erosion to come and far too many vendors," he said.
Director of Melbourne-based consumables distributor Tonnex International, George Solomon, said the local market was particularly challenging for vendors because of its size.
"The Australian market is limited by the population so there might not be enough clients for all the brands," he said. "Globally speaking, a brand might be doing very well - Oki might not be so strong in Australia, but it's got a great presence in Europe, for example. It's a real challenge for them."
Ingram Micro product director, Matt Sanderson, also predicted print vendor consolidation in the next 12-18 months. He said some players would probably leave specific markets, such as entry-level printers.
"The market's just not big enough for how many vendors are fighting over the same piece of territory," Sanderson said. "We're seeing growth in the market at the moment but only because we have a large portfolio of vendors."
Epson is one vendor that has already started addressing challenges in the local print market. In late April, it restructured its local management team in a bid to better support its retail sales channel, where it sees the best opportunity for growth in the years ahead. The decision resulted in four redundancies.
Marketing director, Mike Pleasants, said even office sales were now shifting towards retail and away from traditional channel partners.
"The marketplace is undoubtedly changing and in lots of different ways retail is becoming more active for us whether for home or office," he said. "Traditional office printing was overshadowed for so long by photo printing even though it remains a bigger area of the business, but now it's coming back through retailers like Officeworks." But if entry-level inkjets are a likely area of fallout, where can we expect to see the hottest competition among vendors in the next year or two? Lexmark channel chief, Carmel Mosser, said the real fight would be over office colour printers.
"There are certainly many more players in the market than just five years ago and I think it will come down to whoever can own office colour," she said. "We'll continue to invest in the enterprise because we're successful there, but the best opportunity right now is in that SMB space with colour machines that can print monochrome cheaply."