LONDON, August 10, 2012 — With many hardcopy vendors reporting poor financial results during recent months, it was hardly surprising that the market continued to contract. According to International Data Corporation (IDC), the overall market declined to 4.52 million units in the second quarter of 2012, a fall of 14.1% compared to the 5.27 million units shipped in the same quarter a year ago, showing quite a noteworthy deterioration as the gloomy economic situation continues to hamper recovery. Most declines are being seen in the consumer and low-end laser markets, and this led to revenues declining by a lower level of 4.2% to $2.5 billion in 2Q12 from $2.6 billion in 2Q11.

"The economic situation in Europe is having a clear and immediate impact on sales of hardware," said Arnaud Gagneux, director of IDC's Western European Imaging Hardware Devices and Document Solutions group. "End-user segments that are traditionally price sensitive, such as consumer and small business, have limited budget allocated to hardware expenses, which is reflected in the latest shipment trends. It is not all negative, and there are profitable opportunities, as demonstrated by the growth in A3 color devices and clear proof of the demand for managed services in both the enterprise and SMB segments. This is driving the transition from boxes to services, which are still a challenge for some vendors and their partners. Now is the time to invest and plan for the service-led next chapter of imaging."

According to Phil Sargeant, program director, hardcopy markets are certainly suffering at the moment as demand remains weak due to the dire financial, economic, and political situations in many countries. These factors are leading to high unemployment, budget restraints, and ultimately a slowdown in the shipment and installation of hardcopy products.

All of the top 5 Western European countries showed double-digit declines as many economies could be described as fragile at best. The prolonged eurozone recession and the continuation of the weak euro is impacting revenues and profits for most U.S. and Asia Pacific manufacturers. European subsidiaries are under strong pressure to absorb price increases, but inevitably some are being passed on to their channel partners and customers, with many price rises being seen in hardware and consumable markets over recent quarters.

Most technologies and segments for the quarter show year on year declines, but there was positive growth in the A3 color MFP market of 8.1% and production devices increased by 14.5%. However, there was disappointment for inkjet manufacturers as consumer markets slumped by 16.6% and business inkjets weakened as the poor economic situation continued to affect the general business environment.

This in turn no doubt is affecting demand in both consumer and business markets and results for the first half of 2012 are not particularly encouraging as the year on year comparison for the half year shows a decline of 12.9% and even at this early stage it seems that full year results for 2012 will be negative unless there are some extraordinary shipments during the latter quarters. However, there is optimism that the market, in value terms, will remain stable as prices are holding and there is scope for growth in segments such as higher speed laser segments and production devices.

Country Highlights

Germany

Germany remains the largest European hardcopy market but did suffer in 2Q12 as the market declined year on year by 10.5% to 1.05 million units, accounting for 23% of all Western European shipments. The quarter saw Germany host Drupa 2012, and this helped production unit shipments increase by 14.1%, but this growth was tempered by many declines. Laser shipments contracted by 4.9% while inkjet fell a further 13.8% as consumer demand weakened. The total laser MFP market remained flat, largely due to increases in the A4 monochrome MFP market, but printers declined. Color continued to suffer as orders for A4 devices slackened off but demand for A3 color devices remained steady.

United Kingdom

The U.K. hardcopy market contracted at a greater rate than Germany, declining by 16.1% to 804 thousand units as consumer demand remained subdued and laser printer shipments plunged by almost a third. The overall laser MFP market did increase by 6.8% with exceptionally strong demand for A4 and A3 color MFP products which both saw double-digit growth. There was also strong demand for high speed inkjet printers as the market increased by 20.0% and growth of 28.4% was seen in other production device shipments. Overall growth in the market is, however, being hindered by the uncertain economic climate, which is damaging consumer and business confidence.

France

France suffered the most out of the big three markets as its 2Q12 shipments declined by 18.2% to 765 thousand units. Total laser shipments fell 3.7%, but the inkjet market declined the most as it contracted by a quarter with both consumer and business products suffering declines. As with some other countries, the A3 color MFP market in France increased which helped the overall MFP laser market grow by 14.4%. The best performing market was A4 monochrome MFP which saw strong growth of 31.6% as many vendors increased shipments. The high speed inkjet market remained flat and other production markets increased more modestly at 4.0%.

Notes:

• Source: IDC Worldwide Quarterly Hardcopy Peripherals Tracker, August 2012.

• IDC tracks A2–A4 devices in the Quarterly Hardcopy Peripherals Tracker.

• Hardcopy peripherals include single-function printers, printer-based multifunctional systems (MFPs), and single-function digital copiers (SFDCs). Data for all vendors is reported for calendar periods.

• For more information about IDC's Worldwide Quarterly Hardcopy Peripherals Tracker in EMEA, please contact Arnaud Gagneux (agagneux@idc.com).

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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