by Marco Boer
The wide format graphics inkjet industry is over 30 years old and continues to be a replacement market. There was modest hardware unit growth from 2022 to 2023. Some vendors recovered from their 2022 supply chain challenges; others continued to struggle with getting product to market, which resulted in shifts in market share but no incremental growth overall.
There is competition for output in wide format graphics as commercial printers look for new sources of revenue and profit. Historically most commercial print providers deemed wide format to be too small of a business, but as revenues and profits continue to decline, wide format graphics is an appealing source of profits.
As organic demand grows effectively at the rate of the economy, expansion by commercial printers into wide format graphics means greater competition for output. This new competition has led existing dedicated wide format print service providers (PSPs) to complain that output profit margins are eroding, which in turn pushes the market towards more productive, lower running cost systems.
Total vendor hardware and ink revenue declined slightly in 2023 as the blended average hardware selling price across all segments sold decreased. This doesn’t mean prices of hardware are decreasing, but rather the mix of products sold shifted to lower cost units due to inflation and higher interest rates.
Ink revenues were strong, in part because of increasing ink prices per liter. Manufacturers have stronger pricing control over ink than hardware. The other factor in high ink revenues is that the average monthly print volumes per printer installed is increasing, as PSPs postpone upgrades due to high interest rates.
From a hard reset in 2020, IT Strategies projects wide format graphics inkjet revenues will grow five percent annually between 2024 and 2029—compared to unit shipment growth of about one percent during that same period. However, IT Strategies projects that even at that growth rate vendor revenues don’t return to 2019 revenues until 2029.
Now let’s get into specifics per ink type—aqueous, dye-sublimation (dye-sub), eco-solvent, latex, and UV-curable.
Aqueous
Total aqueous unit sales were up eight percent from 2022/2023, significant growth in a mature market segment. It should be noted that 2021’s COVID pent-up recovery demand put 2021 sales still 15 percent above 2023 sales. Averaging out 2019 to 2023 sales due to the impact of COVID, average annual sales would be around 26,000 units per year. This puts 2023 sales of 26,000 units right where expected.
Sales of 24-inch devices declined about ten percent from 2022 to 2023, in favor of graphics 36 inches and over, which grew 24 percent during the same period.
The installed base grew marginally, but in the outer years as retirements of pre-2019 units kick in, IT Strategies anticipates those retirements to prevent the installed base from growing as new sales are projected to be “flatish”. One reason for the retirements is that IT Strategies expects many older units in the base to be retired due to lack of usage.
One additional source of competition for aqueous wide format is from other specialties like dye-sub and canvas prints printed on latex. Eco-solvent and latex are also expected to continue to steal share from aqueous as they feature lower cost inks.
IT Strategies expects vendor revenues for hardware and ink to grow at a two percent compound annual growth rate (CAGR) through 2029. While no one likes slow growth, it is an indication of market maturity.
Eco-Solvent/Latex
Designed for outdoor and indoor use, eco-solvent and latex are expected to see a slight decrease in unit sales from 2023 through 2029, following a slight decline from 2022/2023. One reason for the decline is that in a replacement market of older, slower units, not as many new higher productivity machines are required.
Similar to aqueous, there is a lot of transition. There is a high rate of retirements of older machines, and new replacement sales have kept the installed base flat, with uptick expected in outer years as these products start to displace more screen/offset output.
Low-end latex printers sell for under $50,000; high-end latex printers sell for over $100,000. The high-end latex printers are often used for décor printing. They account for a small part of the installed base, but because of their productivity they capture a far greater proportional share of revenues than eco-solvent or low-end latex printers.
Combined, eco-solvent and latex account for almost half of vendor revenue share of the wide format graphics print market, making it the largest revenue segment.
UV-Curable Flatbed
UV-curable inkjet presses are productive and offer the lowest cost of print—providing there is sufficient print volume. Initially offered in flatbed format to conform to conventional screen press formats, roll-to-roll UV-curable printers now account for about two thirds of all UV-curable wide format graphics printers sold.
The UV-curable market was hard hit by COVID, as demand for high-volume signage disappeared. There was a strong recovery in UV flatbed after COVID through 2022, but inflationary presses took a toll on new hardware sales and often caused postponement.
What is pushing growth is particularly sub-$75,000 products on the low end. Those units are key to driving flatbed UV-curable unit growth and account for more than 40 percent of all low-end flatbed shipments. It is important to note that IT Strategies excludes UV-curable flatbed printers with a width of less than 30 inches.
The high-end flatbed unit shipments recovered in 2023 despite the inflationary pressures, mainly because of pent-up demand due to a 2022 shortage of components. The component shortage did not affect all vendors equally, and some captured significant gains in market share in 2022. Those gains erased in 2023, leading some to other three year warranties in order to persuade customers to buy their printers.
UV-curable printers tend to last longer than other categories of graphics printers. The durability has prevented the installed base from declining as much as in other segments of the wide format graphics market.
In comparison to aqueous and eco-solvent/latex technologies, UV-curable flatbed installations account for only about eight percent of the entire installed base of wide format graphics printers. UV-curable flatbed printers are closest in productivity to replace screen print. This is why IT Strategies projects the six percent growth in installed base 2023 to 2028 will drive six percent growth in hardware and ink revenue.
UV-Curable Roll
IT Strategies segments the market for roll-to-roll UV-curable printers between low-end under $150,000 and high-end over $150,000. Over 90 percent of low-end printers are priced under $75,000, some as low as $16,000. The young base of low-end roll-to-roll drives installed base growth since there are fewer retirements, unlike the more mature high-end roll-to-roll installed base, which is seeing higher rates of retirements.
Because of the relatively young installed base, the compound growth of the installed base and rising average monthly print volumes, hardware and ink revenue growth are expected to be very positive through 2029 in both the low-end and high-end of the roll-to-roll UV-curable market segment, with a projected three percent CAGR from 2024 to 2029.
Soft Signage/Dye-Sub
The majority of low-end, dye-sub soft signage printers sell for under $15,000. They are easy to buy, and provided there is a capable operator, offer among the highest margins of wide format output. The resurgence of trade shows helped fuel the use of existing installed soft signage printers and belatedly translated into growth of new dye-sub soft signage printer sales in 2023 bringing them back to 2020 levels.
Despite the high value created by soft signage it remains the smallest of all wide format graphics segments. However, rising productivity of hardware drives up AMPVs, resulting in higher consumable revenues per printer, ultimately getting the hardware and ink vendor revenues back up to 2019 levels sometime after the forecast period.
The Bottom Line
Relatively low-priced aqueous and eco-solvent/latex printers continue to dominate unit sales of wide format printers, capturing a steady combined share of market of about 80 percent of units sold.
More important than units is revenue from hardware and ink. UV-curable printers capture about ten percent of the units sold, but because of their productivity, they account for over 33 percent of the vendor revenue spent by PSPs on buying hardware and inkjet ink.
The market is likely to continue to consolidate with centralized control over job orders, processing, and tracking of costs. All of this will require hardware manufacturers to think broader about the products they need to offer, from software to finishing, in order to help their customers make the transition from what is still mostly a mom-and-pop business to a more professionally managed business.
Editor’s Note
Productive wide format printers coupled with consumables that offer more bang for the buck seems to be what most PSPs look for. Combine that with innovative designs and applications that help customers standout as well as workflow and integration systems that ease the pain of a minimized labor force, and wide format graphics continues to persevere.
Aug2024, Digital Output
