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2004 and Beyond: A Forecast of the U.S. Cartridge Market

7 Sep, 2004 By: InfoTrends/CAP Ventures imageSource

2004 and Beyond: A Forecast of the U.S. Cartridge Market

There are a few things that must be made clear before providing the
population forecast for the U.S. cartridge market through 2007. The method of
utilizing historical population estimates, which is the process used by Info
Trends/CAP Ventures, is believed to be very accurate and we are confident in our
tactic for estimating shipments for existing machines.

For historical populations, the step that is most error-prone is the estimate
for retirement rates as machines age in the population. We try to keep these
rates reasonable by using feedback from vendors on cartridge sales ramp-downs as
well as general retirement rates for the segment overall.

We must forecast shipment rates based on the track record for the specific
machine, known changes in the product line up, competition and an estimate for
when we believe a machine will be discontinued in the product line. Therefore,
estimates for future populations for known printers will be riskier.  However,
we believe that our track record here is very strong.

The 0-6 ppm
(pages-per-minute) laser segment has been in decline for some time and no new
machines have been sold in the segment for several years.  What remains is
an existing base that is in a rapid slump.

estimate that the mono laser population in this segment will drop below one
million by 2007.

The 7-12 ppm segment is also slumping. While some machines have shipped in
this segment recently, and there are some machines remaining in the channels,
retirements vastly outnumber any new sales. We do not expect to see any
significant new machines in this segment as it continues to plummet. We
anticipate it will drop below eight million all-in-one units by 2007.

On the other side of the issue is the 13-24 ppm
segment, which is currently the largest segment in terms of total installed
base. It also has a number of machines that are actively being shipped, which
includes the LaserJet 1015, 1150, 1300, 2300. However, this segment is in
transition. Older machines in this speed range were in the workgroup class when
they were shipped, and would still
to be used in workgroups. But most of these new machines are simply fast
personal printers. They are not intended for high throughput volumes and
generally are not used as hard as the workgroup machines. 

So, while the compound average growth rate for the population is 15 percent
(2002-2007), total growth in total print volume is less than 7 percent.
Nevertheless, this is a segment that will remain the largest in terms of
population, total prints and cartridge demand through the forecast period. We
estimate that the all-in-one cartridge demand for this segment will reach 72
million in 2007.

Currently, the 25+ ppm segment, which actually spans two segments, 25-39 ppm
and 40-79 ppm, has the lowest total population of the four segments, although it
is the fastest growing. The machines in this segment are still purely workgroup
printers with the exception of a few machines, such as the LaserJet 9000, that
can also be used as production printers.

Since these are relatively high throughput machines, this segment is already
the second largest in terms of total print volume. Total print volume in 2007
will approach the 13-24 ppm segment, but it will still remain smaller.

In all, cartridge value is expected to grow at a compound average rate of 8.8
percent from 2002-2007 while cartridge units are anticipated to increase by 7.6
percent for the same period.

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