Unit sales of print hardware declined sharply year-on-year in Q2 2022 with lower demand, especially for consumer printers, and falling sales of entry-level and high-end business printers, according to CONTEXT, the market intelligence company.
Revenues held up a little better, due to increased Average Selling Prices (ASPs), sales of more expensive consumer models and the purchase of mid- to high-priced business devices for newly reopened offices. Both figures were very close to the forecast made in CONTEXT’s Q2 forecasting report.
Declining ink cartridge sales led to a sharp drop (of 18%) in unit sales of consumables but a lower fall (only 7%) in revenues from this sector of the market. CONTEXT’s pessimistic-scenario forecast was spot on in terms of these revenues, although sales were significantly worse than anticipated.
Demand is softening as life returns to ‘normal’ after the pandemic, CONTEXT said. Markets are approaching saturation, there is no longer the urgency created by the crisis, and high inflation is sapping consumer demand. However, promotions designed to reduce inventory excess are likely to support sales of consumer devices during Q4 and into the beginning of next year, according to the CONTEXT Forecasting Report Q3 2022.
Individuals and organisations are choosing products more carefully, and distributors and vendors are focusing on growing sales to businesses, particularly Small and Medium Businesses (SMBs). Although ink sales are falling, toner sales are increasing thanks to the return to the office which will be the main driver of the printer market for the rest of the year and during the first half of 2023.
CONTEXT added that this return could also mean Managed Print Services are primed for a comeback over the next six to twelve months.
The supply chain is still a key factor. While overall demand is declining slightly and supply is improving (meaning that backlogs which CONTEXT has seen building up in the last year are getting smaller), high-end multifunction business printers are still being hit by delays that are expected to last until at least the end of the year. Global shortages have left businesses competing for the same raw materials, and some key components remain in short supply. The combination of price increases, supply pressures and continuing transportation issues will not be alleviated anytime soon.
A potential vendor shift to other go-to-market routes, including online sales (either directly or through resellers) is likely to have an impact on distributors, CONTEXT said.
Finally, growing environmental concerns leading to public- and private-sector adoption of paperless policies are having a negative impact on the printer industry, and this will only build over the years to come.
