Idc Says The Us Color Inkjet Market Grew 21% Over 4q98 In 4q99 - Industry Trend or Event

EDP Weekly's IT Monitor, March 20, 2000

Following on the heels of a healthy third quarter, most inkjet printer vendors had a productive quarter in 4Q99. Inkjets ended the year at a record high 19.3 million units, according to IDC. The US color inkjet market did very well, growing 21 percent over 4Q98 in 4Q99.

On the consumer side, Lexmark and Compaq were the bit winners in terms of unit growth, racking up 78 percent and 117 percent year-over-year increases, respectively. "In 1999, US color inkjet shipments from Lexmark's OEM, Compaq, were four times that of Hewlett-Packard's Apollo inkjet printers," says Weili Su, analyst for IDC's US Quarterly Printer Tracker.

Monochrome laser printers did not enjoy the same success as inkjets during 4Q99. Year-over-year shipments grew only four percent due to Y2K-related corporate lockdowns on IT spending. In all 4Q99 unit shipments accounted for only 29 percent of full-year 1999 monochrome laser shipments.

Hewlett-Packard remained the leading vendor in the monochrome laser printer space, shipping close to 71 percent of the market's unit volume. Despite the rumored difficult transition to its new Optra T family of monochrome laser printers, Lexmark maintained its second-place ranking in this market with near nine percent unit share.

Desktop color laser sales in 4Q99 somewhat made up for the mediocre performance in the black and white world. Unit shipments increased 35 percent from 4Q98. "Targeted at office workgroup printing, desktop color lasers are showing increasing acceptance in the corporate space," Su said. Once again, Hewlett-Packard came in very strong in the desktop color laser segment in 4Q99. Its two flagship color laser products, the Color LaserJet 4500 and 8500, accounted for nearly 55 percent of the market. HP's performance in this segment helps to further solidify its leadership position in the color market.

Tektronix rebounded from the sales anomaly in 3Q99 and had 18 percent unit share at the end of 4Q99. Lexmark's aging color products were able to capture 5.5 percent of the market in 4Q99. IDC expects Lexmark to refresh its color laser offerings in the near future, which will help take this colorful battle to the next level. QMS finished fourth in 4Q99 with 4.7 percent unit share. Its Magicolor 2 Desklaser, at an $859 street price, moved a significant volume in both 3Q99 and 4Q99.

Trends To Watch

As hardware margins continue to decline, the Dells and Gateways of the world scramble to look for new ways to enhance profitability. These PC manufacturers have taken a closer look at profitability of other hardware manufacturers such as HP and Lexmark to see how they are able to survive the fierce price cuts and sustain long-term profitability in the hardware industry. They are seeing the lucrative consumables business. Given the successful precedent of the Lexmark-Compaq agreement and the potential of the recent HP-Ford announcement to provide PCs, printers, and Web access to Ford's worldwide workforce, IDC expects other major PC manufacturers to soon jump on the bandwagon, and we will likely see more OEM ventures (both inkjet and laser) as well as HP-Ford-like deals in the near term.