Forecast Perspective: Impact Printers Declining, Again


Larry Jamieson

First-Half 2012 Impact Printer Forecast

Introduction

The impact printer market consists of two major segments: serial dot matrix and line dot matrix impact printers. Serial dot matrix impact printers (or serial-impact printers) print individual characters or a single row of dots onto paper through solenoid-activated print wires fired against an inked ribbon. Line dot matrix impact printers (or line-impact printers) are much faster than serial-impact printers, and they have multiple print elements positioned across a print line that move across the paper on a reciprocating bar or shuttle. While the installed base for the impact printer market still contains small numbers of older types of impact printers—notably band printers—new shipments consist exclusively of serial-impact and line-impact printers.

Although these devices currently play a relatively minor role in the overall printer market, there are certain applications and environments in which both serial-impact and line-impact printers are important for businesses. Shipments of these units consist primarily of devices that are purchased to replace older printers in business environments where low-cost output is required and print quality and noise are not issues or in which multipart forms are critical.

Worldwide Shipments

Impact printer sales continue to decline, dropping to 1.5 million units in 2011 from 1.8 million in 2010. While the economic downturn is a major short-term factor in this decline, many legacy impact printer applications are being discontinued, leaving fewer opportunities for sales of these machines.

Also, IT managers are currently reassessing their long-term requirements for output devices, and many of these managers are exploring the redeployment of mature technologies, including impact printers, rather than purchasing new devices. The durability of impact printers limits segment growth because users rarely need to replace impact devices. Home users lost interest in impact printers long ago, especially once ink jet and laser printers began offering better print quality, color capability, decreased noise levels, and lower prices. As a result, shipments of these devices are forecast to decline to 1.3 million units by 2016, as shown in Figure 1.

Shipments of impact printers in emerging markets in the Asia-Pacific region increased in 2010 from 2009 levels, but again declined slightly in 2011. Shipments are strongest in Asia Pacific, particularly in India and China, where there is still a market for cheap, reliable printing with adequate print quality. Most of the products sold are designs from Japanese vendors, such as Alps, Citizen, Seiko Epson, Seikosha, and Star Micronics, which have either left the dot matrix market or have significantly cut back on the products they offer. There was a considerable decline in Latin America and Europe, the Middle East, and Africa (EMEA) in 2011 and 2010. Shipments in North America continued to decline in 2011, falling below 100,000 units (see Figure 2). The recession had a substantial effect on the impact printer market, and replacement of existing devices for multipart forms and legacy business applications either will be delayed or cancelled as workforces shrink and businesses look for ways to economize.

Requirements for multipart forms to record business transactions in some Asian, European, and Latin American countries will extend demand for impact printers through the forecast period. However, legal requirements may change, which could eventually end much of the demand for multipart forms and, consequently, for impact printers. In some developing countries, such as India, there are still opportunities for impact printers in small and medium-size enterprises where users still require multipart forms.

Worldwide Average Sales Prices

Average sales prices for line-impact printers will drop from about $7,096 in 2011 to $6,239 in 2016 (see Figure 3). The main source of competition for line-impact printers will be laser technology, which will cause a pronounced decline in average sales prices over the forecast period. Over the same period, average prices for serial-impact printers will drop from $508 to $495. Because there is a lack of competition in this segment, price erosion will be negligible.

Worldwide Revenue

Revenue will decline along with shipments through the forecast period. Total revenue for line- and serial-impact printers amounted to $862 million in 2011, down from  $1 billion in 2010, and that figure will drop to less than $687 million in 2016. As shown in Figure 4, serial-impact printers will contribute to the vast majority of the revenue even though average unit prices are much lower for these devices than they are for line-impact printers.

Worldwide Serial-Impact Printer Market

Products in this segment use various arrays of 9, 18, or 24 pins. Twenty years ago, serial-impact printers were the mainstay of the printer market. However, ink jet is now cheaper and faster and is capable of producing documents of better quality with excellent color. As a result, serial-impact printers have largely been supplanted, except in instances in which rugged capabilities are required or users need to print multipart forms. Figure 5 shows representative serial-impact models from several vendors that are currently shipping. Some models have been part of the vendors’ product lines for more than seven years, which reflects the limited amount of development taking place in this segment.

Overall, the serial-impact printer market declined rapidly in 2011 to 1.5 million units after a small decline in 2010 to 1.8 million units from 1.9 million in 2009, as shown in Figure 6. The Asia Pacific market accounted for 55 percent of unit sales in 2011, primarily as a result of government requirements for multipart forms in China and India. Unit shipments will continue to decline through the forecast period to about 1.3 million in 2016. There will continue to be sales opportunities in Asia, but shipments in the rest of the world will largely consist of a dwindling number of replacements. Some environments in developed countries continue to require impact printers for legacy systems, such as retail receipt printing and other multipart forms applications, but this demand will decline as companies continue to update their systems and shift to other printing technologies.

There have been few new serial-impact printer introductions in the past few years, and most consisted merely of minor refreshes of existing products.

Vendors

In late 2010, OKI introduced a new low-end product, the ML1120, which was followed quickly in January 2011 by the ML620, ML621, ML690, and ML691 midrange dot matrix printers. OKI continues to be a strong player in this declining market. It has been less active in new product development, but it continues to hold a very solid position in small and medium-size business markets through its very loyal reseller base. OKI’s strengths are its product reliability and support. It is critical for OKI to remain competitive in impact printing because its laser printer offerings have not gained significant market traction, nor has it had any success with ink jet technology.

Epson remains active in this segment, and it continues to introduce new models. While serial-impact printers would appear to be a segment in which Epson could afford to discontinue product development, Epson’s continued activity in this market prevents the company from losing its established position. Epson’s most recent introduction is the LQ-2190, a higher-speed, 24-pin A3 printer for the forms market that the company introduced in Europe in April 2010.

InfoPrint Solutions continues to provide products to the systems market. These higher-end devices might not sell in large volumes, but they continue to provide a solid revenue stream, especially for supplies and services.

TVS-Electronics and WE Peripherals, both based in India, have a strong share of the domestic market in India and are looking to expand into other emerging markets with their serial-impact printers.

Worldwide Line-Impact Printer Market

This segment includes all line-impact printers. Currently, only line dot matrix impact printers are sold, but it is likely that a few band printers are still in use. Speeds range from 300 to 2,000 lines per minute (lpm). These printers are primarily used in back-office environments and are most often associated with legacy mainframe and minicomputer applications. Their advantages are reliability, speed, and multipart forms capability. Representative line-impact printer models are shown in Figure 7.

Line-impact printer shipments declined in 2011 to about 11,600 units, down from 15,400 units in 2010, as shown in Figure 8. The decline will continue through the forecast period, dropping to 7,400 units by 2106. This is part of a long-term trend resulting from the dwindling number of companies that employ legacy back-office applications that use line printers.

Margins for line-impact printers are strong. Although the overall market is declining, there is still steady demand for line-impact printers for some applications. The net result is that remaining vendors in the business—Printronix and its OEMs—are able to maintain respectable revenue streams. The durability of line-impact printers serves to limit demand for replacement models, even among sites with applications that require impact printing. Refurbished line-impact printers are widely available at competitive prices, which also limits demand.

Vendors

Printronix and its OEMs, HP and InfoPrint Solutions, are the primary vendors in the line-impact market. Limited competition and stable demand keep these vendors active in the segment. In 2005, Printronix introduced a line of new energy-efficient products that spurred a number of replacements. Sales of these new products generated profits for Printronix in this consistently declining market segment.

Printronix and TallyGenicom had been the primary manufacturers of line-impact devices, but when Vector Capital acquired Printronix in 2007 and Printronix acquired TallyGenicom in 2009, the market was left with only one line-impact printer manufacturer, though TallyGenicom products are still available. Both Printronix and TallyGenicom recently introduced new products. Printronix refreshed its P7000 line printer, the company’s main product, and added a new model—the 2,000 lpm P7220—in June 2010. Printronix also offers a range of products for the HP market. TallyGenicom introduced the 6605 in May 2011.

Conclusion

The number of legacy applications in corporations that employ serial- and line-impact printers continues to dwindle, but many small businesses that still need multipart forms for transactions continue to use these rugged machines. In China, India, and other emerging market countries, dot matrix printers are still widely used for their reliability and low per-page costs, and the devices’ print quality is considered sufficient for many applications.

About the Author

Larry Jamieson leads Photizo’s Hardware Advisory Service. He has more than 30 years of experience in the information processing industry. Previously, Jamieson was responsible for ink jet and laser desktop printer and MFP analysis, forecasting, and client support at Lyra Research. Prior to 1995, Jamieson was associate director of the Electronic Printer Service at BIS Strategic Decisions.

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