What lies ahead in 2017?

| Press Release
Actionable Intelligence logo (cropped)
January 24, 2017

The tenure of President Trump and the process of the UK leaving the European Union are just some of the events we know will definitely happen this year, both against the odds 12 months ago.
But what can the office imaging industry expect if we cast our minds forward this year?

According to US-based research firm Actionable Intelligence, in a recent webinar ‘2016 Year In Review: The Office Imaging Industry’s Most Transformative Year And What’s To Come in 2017’, there were all kinds of acquisitions and strategic alliances formed last year and 2017 will be no different.

Last year, after months of rumours, a consortium of Chinese investors acquired Lexmark, Foxconn acquired a majority stake in Sharp, Ninestar and Hubei Dinglong made key acquisitions in China, and Xerox split its business.

According to Actionable Intelligence President Charles Brewer, 2016 was “wildly dynamic”, with consolidation across the industry. He predicted more M&A activity this year, with plenty of attractive acquisition targets as there are too many firms fighting for a piece of the action. Brewer said the third-party supplies industry in China will continue to consolidate, while more foreign investment in US businesses seems likely.

He added: “The competitive landscape started to change as we saw acquisitions and new alliances being formed.”

Volatility of exchange rates have also impacted the market, particularly in the UK, where the pound hit a 30-year low against the dollar after the Brexit vote. The Japanese market has also been affected.

“We’re still seeing some emerging markets are feeling a lot of stress,” said Brewer. “Specifically I’m thinking about Russia, Brazil. Those economies are now in recession and have been for a little while and are expected to remain so this year. China continues to grow but not at a rate that we once saw so some of the opportunities there have been turned down.”

There is also perceived uncertainty in the developed markets, with the implications of Brexit set to add to the mix.

But for the year ahead, the firm does not anticipate any big changes in the US market.

Brewer said: “There’s a lot of uncertainty in the US now with our new President, and people are wondering what’s going to happen with the economy, but it really appears strong.”

He referenced a recent survey of 11,000 US employers by Manpower which said they either plan to maintain staffing levels or add to them: “If you look at some of the segments that are going to be hiring, it’s professional services, finance. These are all industries that do a lot of printing, so good news for us.” 

Looking at the industry’s hardware outlook, the trend now is for smaller machines with expanded feature sets, according to Christina Bonadio, Executive Editor of Actionable Intelligence. Meanwhile the demand for consumables has fallen.

She said: “We have seen vendors in most markets launch cartridges and drums that have higher yields and lower costs per page.” 

Bonadio added: “Looking at sectors of the market which are not doing well, consumer cartridges are a big shining example. Also monochrome printer markets have been declining for some time.” 

The ramifications of a key legal case for the industry "Lexmark vs Impression Products" over whether patented products first sold outside the US can be subsequently imported into the country is set to have a big impact this year, with a decision expected in June. 

“Whatever the Supreme Court decides is going to be very significant for the remanufacturing industry in the US,” said Bonadio. “If the court opposes both the federal circuit’s decisions, it’s going to mean that patent holders retain US patent rights, while for products held overseas, they can retain patent rights for products sold with a lawful what they call ‘single-use only restriction’.

“If the Supreme Court overturns the decision, it will make life a lot easier for remanufacturers. We could also see a mixed decision with the Supreme Court overturning one patent exhaustion rule but not the other.”

In conclusion, Brewer said that for 2017, one constant is likely to remain: “There will always be a battle between third-party supplies vendors and OEMs.”

Maybe some things never change. 

(Thanks to opi.net for the summary.)

Franklin (MA), USA
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