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Trends in Production Color Digital Print
By Jim Hamilton, InfoTrends

Color printing continues to drive the production digital print market and will be the most important overall trend in this and coming years, as system vendors and print service providers adjust to a changing environment that values turnaround time, targeted messages, and reader impact over historic attitudes toward craft and quality.

The Color Tornado

We are at a time in color digital printing and copying technology that InfoTrends calls the Color Tornado (along the lines of what the author Geoffrey Moore describes in his book “Inside the Tornado”). There are many product introductions and almost every vendor has the opportunity to do well with new color offerings. This is also a phase of rapid adoption by print service providers, and given that these products appeal to corporate workgroup users as well, they are appearing with greater frequency in corporations. The Color Tornado puts service providers at risk, particularly smaller ones, since they now have less to differentiate themselves from what is available to their customers inside corporations. There is also a risk to vendors who need to be prepared for the more solutions-oriented phase that comes after the tornado and the disruptive nature of higher speed products with lower capital and running costs.

The Color Tornado is also driven by drops in the cost of color production, which will lead to additional retail color price declines. Data from InfoTrends’ November 2005 study entitled “The Evolving U.S. Digital Color On Demand Printing Opportunity” indicates that nearly 40% of the respondents would move to digital at twelve cents per color page, while over 51% said they would move at eight cents per color page. Price declines will further advantage digital methods versus offset and raise the range of run lengths where digital print is used.

InfoTrends’ surveys confirm that digital color, and the value-added applications that drive it, will be the source of growth for system vendors and print service providers. The market is still inhibited to some extent by high per-page costs and high retail prices, but these will drop over time. Cost and price are intertwined. They feed off each other, driven by applications such as direct mail, transpromotional documents, and on-demand books, and facilitated by Web-to-print tools. With cost reductions, productivity enhancements, and improved workflows, InfoTrends anticipate significant volume increases in color printing over time.

Universal Production

Universal copier/printers (UCPs) have the ability to economically print black & white and color on the same device. Now the “universal” concept is moving to production printing. Vendors are focusing on making universal production an economic reality through service/supplies incentives or new product designs. In our recently published study entitled The Evolving U.S. Digital Color On Demand Printing Opportunity, InfoTrends found that monochrome volume on color devices is already significant.

Figure 1: Monochrome Volume on Digital Color Equipment

Note: The low speed category includes devices with color speeds up to 23 ppm, the medium speed category includes devices with color speeds from 24 ppm to 59 ppm, and the high speed category includes devices with color speeds faster than 60 ppm.

AMPV = Average Monthly Print Volume; N = Number of respondents in the research

This research shows that about a quarter of all black & white pages are currently being printed on color devices in print-on-demand environments. Lower-speed color devices account for a higher percentage of the black & white pages at this time, but that is due, at least in part, to the influx of UCP devices in the lower and medium speed classes. The 22.6% of black & white output produced on high-speed color devices speaks to the high level of need for this capability despite its relatively high cost. InfoTrends expects to see this percentage increase as vendors bring universal production products to the market that make it more economical to print black & white on production color devices.

One of the reasons that universal production is important is because production digital print products have tended to fall easily into two camps: black & white and process color. One major exception has been HP Indigo, whose devices can print anything from one to seven colors, including special color mixes or Pantone colors. HP’s announcement of improved monochrome speed and running cost for the HP Indigo press 5000 was an important move. Now the new HP Indigo press 5500 extends those capabilities. Another interesting development has come from Océ with its VarioStream 9000 series, which was first introduced as a duplex monochrome (i.e., 1/1) device and whose capabilities have grown to support spot color and will ultimately support process color. Other vendors may pursue such scaleable product offerings to address users’ needs for mixed color and black & white documents.

Vendors of cut-sheet black & white production devices won’t sit back idly and let the monochrome volume walk away without a fight. New models with higher speed capabilities are entering the market. Equipment pricing for monochrome devices is becoming increasingly competitive as there is less room for reductions in service and consumables costs.

Forecasts and Market Share

In a discussion of the production digital color market there are two extremely active areas that warrant special consideration: high-speed color copier/printers and production color printers capable of volumes greater than 1 million impressions per month.

High Speed Color Copier/Printers

Production color copier/printers experienced very strong growth between 2005 and 2006 in both office and production environments in the United States. More than 161,000 were placed overall. Production sites, such as in-plants, quick printers, and commercial printers, are finding the speed and convenience of these products very attractive. Production sites accounted for the placements of more than 43,000 of these devices. The Konica Minolta bizhub PRO C6500 entered the market toward the end of 2006 as the first product in the 60+ ppm color copier/printer category. This 60-ppm device joins other 50-ppm offerings and heralds the arrival of faster and faster color copier/printers.

Over 75% of the total placements of the color copier/printers occurred in office environments in 2006. We are seeing a major shift, as more of the slower devices (77% of the 24-40 ppm category and 61% of the 41-59 category) were placed in office/workgroup environments.

Figure 2: U.S. Production Process Color 2006 Market Share (copier/printers only)

Note: This includes only those devices that reside in production environments.

From a market share perspective Canon continues to occupy the top spot in the United States in this category, but Konica Minolta, Xerox, and Ricoh are not far behind. The market dynamics of particular products and vendors are also interesting, given the slim difference between the market shares of the top competitors. For example, Konica Minolta’s 50-ppm bizhub PRO C500 is also branded and sold as a system by IKON. In addition, the Ricoh Family Group includes branded products from Savin, Lanier, and Gestetner. Grouping either the Konica Minolta and IKON offerings together or counting the Ricoh Family Group companies as one would shake up the market share rankings considerably. New product introductions in this space will also have the potential to have a great impact this market.

High Volume Production Color Printers

To better distinguish devices based on their capabilities within the more general production color (24+ ppm) segment, InfoTrends established three volume cuts based on the product’s duty cycle: products with duty cycles less than 100,000 impressions per month, products with duty cycles between 100,000 and 1 million, and products with duty cycles of 1 million or greater. (Note: Duty cycle is a measure of the highest print volume that a device is capable of running, in other words, the maximum number of impressions that the vendor recommends that a device can print in a month without risk of lasting damage to the product.) Overall, strong growth occurred across all of the market’s sub-segments. The majority of these units were placed within the <100,000 pages-per-month sub-segment. As the products have rolled out to a broader audience, more and more of these lower volume devices are heading to office/workgroup settings.

The 1 million+ production color segment is made up exclusively of high-volume production printers such as the HP Indigo, Kodak NexPress, Punch Graphics Xeikon, and Xerox iGen3 product families. High-speed inkjet products are also included, such as Kodak’s Versamark line. In 2007, new inkjet products from IBM Printing Systems (now part of a Ricoh/IBM joint venture called the InfoPrint Solutions Company) and Screen will join this category.

The 1 million+ duty cycle segment experienced solid growth in 2006, spurred by the strong success of the HP Indigo product line. With nearly 50% growth in placements, HP Indigo was able to pass Xerox and take the lead in market share with nearly 42%. Xerox showed moderate growth and was thereby able to retain nearly 33% of the market. (Note: InfoTrends counts Xerox’s high-end DocuColor printers such as the DocuColor 500, 7000, and 8000 in the 100,000 to 1 million category.) Kodak NexPress, Punch Graphics Xeikon, and Kodak Versamark make up the remaining share.

Note: This represents all of the products in this class, as all devices of this type are located in production environments.

Digital Production Color Directions

These two key areas (high-speed color copier/printers and high-volume production color printers) are at the heart of the digital revolution and signify an intensifying fight over graphic arts pages. Companies like HP Indigo, Kodak, Xeikon, and Xerox have led the charge in bringing high-end process color digital products into production graphic arts environments. Now the competition will increase as traditional copier vendors such as Canon, Konica Minolta, and Ricoh begin to play a larger role. Some of these products will be high-speed copiers, while others, like Canon’s imagePRESS C7000VP, will be printers.

This will liven up the production space as these new offerings target mid-production volumes and offer excellent speed, cost, and functionality at price levels that were unheard of as recently as two or three years ago. These new market entrants are applying pressure to the established players, who are responding with improvements of their own. All in all, this bodes well for system users, who will benefit from the highly competitive environment.

The production digital color market has been built largely upon the success of toner-based, electrophotographic devices. Over time, however, InfoTrends expects that inkjet technologies will garner more pages. In production environments there is a large gap between current color inkjet products like RISO’s economical HC5500 and Kodak high-volume Versamark offerings. The early indications suggest that this gap will be filled by products from vendors such as HP and Screen, including new technologies from Kodak’s laboratories. More vendors will join the market as well, as Olympus did with its technology demonstration at Graph Expo. To date, inkjet technologies have had a relatively small impact in production print environments compared to the total volumes produced on toner-based products. An interesting indicator of the future of inkjet for production will be how well HP manages to establish its Edgeline inkjet technology in the office versus the established toner-based competition.

Other technologies are also contributing to the move toward quick turnaround, cost-effective, short-run color. Direct-to-press devices like those from Presstek and Screen provide ink-based quality in a range of run lengths.

Print Volume Shifts and TransPromo

When InfoTrends compiled its first On Demand forecast in 1996, we knew that many of the pages would transition from analog to digital copiers. We also knew that many of the pages produced on offset presses would move to digital printers or copiers. As we look at the market landscape today, it is clear that many of the monochrome pages being produced in data processing environments are also ripe for transition. This time the transition will be from monochrome to color.

To say that all of the existing data processing pages are produced in monochrome is not entirely accurate. Some are printed with spot color. Others are digitally printed in black on top of a pre-printed color shell. One trend that is becoming increasingly clear is that more service providers are moving toward printing entire color documents digitally. This trend, which some call “forms replacement,” is simply the movement away from pre-printed stock or shells. Color is instead printed in one pass on white paper.

Another trend is helping to drive the move away from pre-printed shells. Document owners want to include marketing messages in their transaction documents. To target these messages toward individual recipients, a digital output method is required. Since marketing messages are often printed in color, these promotional messages in transaction documents are accelerating the move to full color transaction document printing. InfoTrends calls this developing area “TransPromo” and is dedicated to nurturing this market place through events like our TransPromo Summit, which will take place in New York City on August 22-23. (See www.transpromosummit.com for more information.)

This was a much talked-about area in the past, but there were roadblocks such as color cost and the ability of transaction datastreams to handle color objects and images. These barriers are beginning to fall away. One important factor that will help to drive this trend forward is the work of the AFP Color Consortium. Founded by IBM, the consortium now includes dozens of members whose work will set the stage for the page transition to color for AFP. As the pieces come together, system vendors will have to move quickly to be well-positioned for this opportunity.

What’s Next?

This study was funded by the Print Education & Research Foundation. © 2007 InfoTrends, Inc.

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