2002 Digital Printing Market Forecast

In the financial and manufacturing industries, market analysis and forecasting is one of the major suppliers, competitors and customers' schedule business. However, in the printing industry, suppliers often invest in various market research reports, and their purpose is also to take a leading position in the market by taking advantage of the latest technology trends. This article will briefly review some of the trends in the digital printing market.

The variability in variable data printing has increased In the past five years, in the field of digital printing, no topic has attracted more attention than variable data printing, and more publicity has been obtained. Variable data printing is promoted from the traditional printing infiltrated into various application fields by the promotion of OEM companies. It is a digital color printing method, such as the production of personalized customer communications. However, in fact, variable data printing is not a new term. As early as two decades ago, personalized digital monochrome printing was already used in the marketing field. Its purpose was to increase the feedback rate of customers.

Unfortunately, digital color printing has not always caused a strong reaction in the direct mail market and transactional document market. According to Strategies on Demand, the total number of printed digital color prints in 2001 was less than 0.2% of the total number of digital prints printed in these market segments. The reason is very simple: If you digitally imprint monochrome content on a four-color offset preprinted form, only 1 to 1.5 cents per A4 product (including equipment, maintenance, labor, and supplies, excluding paper costs) ; And the same product is produced directly by digital color printing requires 7 to 15 cents. The lingering high cost of digital color printing has changed the price structure of direct-mail advertising and form-printing markets, and the price of a single page in such markets is usually around 3 cents.

As this situation continues to ease, manufacturers have extended the application of "variable data printing" to any product available on digital presses, whether it is color or monochrome. Last year, Heidelberg supported the company's one-on-one product with examples of digital monochrome printing on a preprinted form on a four-color offset process. Heidelberg's new digital color press, the NexPress press, is a typical device for variable data printing. Through this device company, short-run printing applications including online purchasing and real estate market mortgage guarantees are displayed. We are seeing more and more frequently that custom-tailored short-run printing has once again been classified as variable data printing. The result of redefining products in this way is that even if the market for personalized color printing does not develop as proponents have predicted, it will bring new life to the variable data market in 2002.

The push to change from push to pull advocated variable data printing as it tried to push it into standard direct mail modules, creating a significant barrier to the popularity of this process, as it was for most traditional direct mail industries. Digital color printing is too expensive. On the other hand, market feedback application products provide a good market opportunity for digital color printing. Traditional direct mail advertisements push information to customers. In contrast, in market feedback activities, customers actively absorb information and they ask questions through the Internet or respond to direct mail advertisements, telemarketing, or other advertising methods. Now that customers are eager to seek information to make the final purchase decision, the digital printing cycle has the practical value, processing capacity and shipping speed. This value is far greater than the traditional promotion.

A 1998 Strategies on Demand report pointed out that by 2005 digital printing will have a value of $4 billion in market feedback applications. Since last year, the industry has begun to realize the value of digital printing in this mature pulling model. We see more examples of market indirect production and customer satisfaction, especially in the securities, insurance, real estate and retail sectors. The most important aspect of market feedback application products is that they combine on-demand printing with direct ways for consumers to meet their needs, and fully develop the value of digital printing. Those who believe that print-on-demand is a low-value business model will soon change their history.

Printing is no longer a commodity According to the office or computer equipment industry, some OEM companies have seen the traditional printing model as a commodity transaction that could be avoided. As early as the cost of digital color printing was 20 times the cost of short-run offset printing, OEMs considered non-traditional printing as the only hope to attract customers. For example, the early competition between Indigo and Xeikon was to create a new printing market, producing special products such as short-run four-color business cards or personalized juvenile books.

Traditional printing is no longer seen as commodity trading because of the huge potential market. As early as the mid-1990s, OEM manufacturers of digital monochrome printers recognized this opportunity and began to get involved in this area, but at that time, the practice was not to develop new application products or to expect customers to enter unfamiliar business areas, but to pass Mark the prices of equipment, maintenance and consumables, and try to gain a greater share of the traditional short-run monochrome printing market. According to Strategies on Demand estimates, based on shipment data, the total number of digital prints in 2001 accounted for approximately 25% of the monochromatic publications and commercial printing market. As the cost of digital color printing falls, OEM companies will further profit.

Re-invented centralized production technology experts often remind us that the transmission of electronic data is cheaper and faster than transporting paper. In the late 1990s, industry analysts predicted that "transport and reprint" would replace "print and resend." Digital vendors then formed a loose alliance, hoping to carry out production and product transmission worldwide, with products ranging from books and brochures to advertising and stationery. Some companies believe that the Internet will transform most centralized production into departmental or desktop production. The concept of “send and reprint first” has been greatly promoted in a period of time. As with many other technology trends, distributed printing quickly faces the economic reality of the market. However, technologists did not take into account that the cost of partial printing on hundreds of small presses is much higher than the cost of printing on several large, centralized presses. Second, they did not consider that the difficulties and troubles of managing distribution products under different print production characteristics are also much greater. Although it is possible to ensure that the printing materials and finishing standards of each printing point are standard, it is still difficult to guarantee. The quality of the product can be highly consistent. Finally, they do not understand the significance of transaction costs at each printing point. When using a centralized production method, the costs of inventory management, ordering, production scheduling, invoice development, and profit processing are all amortized based on the total amount of orders. However, in the distributed production process, these costs are apportioned according to the smaller orders at each printing point, and therefore multiply according to the number of printing points.

Despite these unfavorable factors, the distributed digital printing model, at least for some products, has improved the production of traditional printing. For example, distribution channels for commercial book publishing can support digital printing production in some major metropolitan areas, and are closer to retailers. However, for most products, the flexibility and economic scale of post-press processing will be more likely to be achieved through desktop publishing or department-level production of large-volume operations in the foreseeable future.

Cost and Price Decrease Although all digital color press OEM manufacturers have stated their way of lowering printing costs, the actual results are not obvious. In fact, in the past two years, at least one OEM has not only reduced but also increased the operating costs of the equipment. At present, the lowest direct printing cost is about 7 cents per A4 print. The speed and productivity of the press are also quite good.

In a survey conducted by Xeikon in 1998, it was predicted that with the continuous development of digital color printing, direct printing costs will be reduced to 5 cents per A4 sheet (excluding paper costs). Xerox’s goal for the iGen3 press is also 5 cents. However, when Xerox combined this data with “operational costs” (including maintenance and consumables expenses), the actual cost far exceeds this value. .

For the printing suppliers in the industry, the continuous increase in the production capacity of digital color printing has forced prices to drop faster than people hoped. The cost limit for leaflets has been far below the average price setting, but it is still too high for most people. However, many printing companies have begun to compete for larger print jobs (including personalized printing) with 25 to 30 points per A4 sheet. Strategies on Demand predict that by 2005, the average cost of digital color printing will decline at a compound annual rate of 16%.

Extremely unstable demand The growth of the digital color printing market has always been a very controversial topic. In January last year, Strategies on Demand predicted that the demand for digital color publishing and commercial printing production will increase from 3.9 billion USD in 2000 to 7.3 billion USD in 2005, basically in line with the healthy 13% mixed annual growth rate (CAGR) . The annual market forecast released by CAP Ventures at the end of last year estimated that the “print retail volume” in the color market branch will increase at a rate of 18% CAGR, from US$14 billion in 2000 to 32 billion US dollars in 2005. The difference in these predictions is due to the fact that the CAPV values ​​include color copying and digital print production. However, the difference in target growth rates reflects the difference between supply and demand.

Supply-side forecasts are based on surveys of printing companies. Analysts obtained "printed retail volume" by estimating the average output of each device and the average price of each product. The forecast of market size and growth largely depends on the annual assumed price. If the estimated annual price is gradually declining, for example, 10% per year, the predicted print traffic in the results will have very high growth.

In general, the color and monochrome digital printing production market can only maintain the growth rate of 12% CAGR until 2005, and there will be no breakthrough growth forecast by suppliers, but it is faster than the 4% predicted by the traditional printing industry. many.

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