1. U.S., W. European and World Wide Market and Trends for Laser and Inkjet Supplies
John Shane
Director, Communication Supplies Consulting Service September 2010

2. Focused Credible Responsive Visionary
Industry analyst firm focused on the consumer imaging, office document technology and production printing & publishing industries. UK
Boston
Beijing
Tokyo
Focused Credible Responsive Visionary

3. Relationship-Based Consulting Services
Hardware
Services
Software
Supplies
Digital Photography
Image Scanning
Photo Printing
Internet Imaging
Digital Photography
Internet Imaging
Image Scanning
Communication Supplies
Photo Printing
Consumer
Digital Peripherals Solutions
Image Scanning
China Printers
Network Document Solutions
Managed Print Services
Dynamic Content Software
Network Document Solutions
Communication Supplies
Office
On Demand Printing
Wide Format Printing
Jetting Technologies
Production Workflow Solutions
Document Outsourcing
Business Development Strategies
Dynamic Content Software
On Demand Printing
Production Workflow Solutions
Communication Supplies
Production

4. U.S. Print Volume (B) “Print” volume withstood previous recessions
Explosion of devices, analog to digital
Hint of some impact from recessions
Print volume declines in ‘08 and ‘09
Market is mature
Recession is be deeper
Office market is most vulnerable
Fewer people and less activity
Focus on costs, electronic workflow
Production is more resistant
Analog to digital
Higher value pages (color)
Home may be the most resistant –but for photos?

5. Recession’s current impact on the supplies market
Overall print volumes are down in ‘09, 9% from the peak in 2007
Reduced headcount and activity
Emerging MPS impact
Great incentive to save money on office supplies
3rd Party Product gains share but not enough to offset overall decline
35% share for B/W printer, 23% share for B/W MFPS, 6% share for Color devices
Duplex rates
Restricted color use
Growing interest in Managed Print Services
Print volume reductions come with MPS

6. Recession’s longer term impact on the supplies market
Slower growth than previously forecasted
Slow return of white collar employment
Residual reluctance to increase costs
Slower decline for B/W printing
Slower shift to color, on-going controls
Some aftermarket share gains to stay?
MPS gains share and impacts supplies
Print volume reductions within an organization
Shift to less-paper processes
Increased use of 3rd party
Duplex printing
Shift to higher volume machines with lower CPP?
InfoTrends believe that the recession will have a long term impact on print

7. Supplies Market Forecast 2008-2013

8. U.S. & Western Europe Installed Base Forecast Units (000)

9. U.S. & Western Europe Total Print Volume Forecast (B)

10. World Total Print Volume (B) Electrophotography and Desktop Inkjet

11. World Total Print Volume (B) Electrophotography and Desktop Inkjet

12. U.S. & Western Europe Electrophographic Marking Supplies $M at Final POS Electrophotographic Copier and Printer and MFP
Total Value=Toner, Developer, photoreceptor and Residual Cartridge US
Western Europe

13. U.S. & Western Europe Electrophotographic Marking Supplies $M at Final POS Electrophotographic Copier and Printer and MFP US
Western Europe

14. U.S. Serial Inkjet Cartridge Units (M) Serial Inkjet Printers/MFPs
Small growth in cartridge volumes….Cartridges increase despite stable print volumes as OEMs introduce smaller yield cartridges to lower the basket/entry price of their consumables.
US larger again – Photo printing less of a home activity in Europe, office printing more likely to be black. US
Western Europe

15. U.S. Serial Inkjet Cartridge $M at Final POS Serial Inkjet Printers/MFPs
Revenues flat due to OEMs trying to lower their consumables entry price. Inkjet unlikely to decline due to maturity of the market…..Product evolution (i.e. Wi-Fi etc) may cause shift in overall IB levels, but print volume expected to remain stable. US
Western Europe

16. U.S. Facsimile Marking Supplies $M at Final POS
Revenue declines inline with IB US
Western Europe

17. U.S. Total Marking Supplies $M at Final POS
Western Europe

18. World Total Marking Supplies Value at Final POS $M Electrophotography and Desktop Inkjet

19. World Total Marking Supplies $M at Final POS Electrophotography and Desktop Inkjet

20. WW Marking Supplies Value at Final Point of Sale $M

21. OEM vs. Aftermarket

22. U.S. Aftermarket Share of Total Marking Supplies $M ElectrophotographyWE

23. U.S. Total Aftermarket Supplies Revenue at Final POS $M ElectrophotographyWE

24. U.S B/W Laser Cartridge Channels 2009 Share of Units

25. U.S Color Laser Cartridge Channels 2009 Share of Units

26. U.S. Color Aftermarket Issues
Aftermarket penetration about 7%
Higher for separates and for non-Chemically produced toner
Lower for AIOs
Developer
AIOs very difficult . Barriers are:
Toner
Matching toner to drum
Process problems/reliability
Reseller concerns?
Users are ready to try aftermarket color
Resellers may not be ready to offer them

27. Leading laser cartridge manufactures supplying to the US market
Remanufactured Cartridges
New Build
Clover (US, Mexico, Canada, Vietnam)
Ninestar / G&G (China)
(Clover) West Point Products (US)
Print-rite (China)
Nukote (Mexico)
Uninet (China)
MSE (US)
Media Sciences (production in China)
PTI (US)
GPI (Taiwan)
Print-Rite (China)
GCC (Hong Kong)
Turbon (US/Europe/Asia)
Hana (Korea)
AFEX (China)
MMC (China)
Mipo (Hong Kong)
Others

28. Q47: Toner Cartridges Typically Purchased for Laser PRINT Devices
Which type of toner cartridges does your company typically buy for your laser printers or multi-function devices?
N =

29. Q53: Whether Toner Cartridges are Refilled
For the non-OEM, refilled, remanufactured, compatible toner cartridges that you use.
N =

30. U.S Inkjet Cartridge Unit Demand (M)
Integrated cartridges remain the majority in the US, due to the dominance of HP. Decline in lexmark has been offset by growth of Dell.

31. Western Europe Inkjet Cartridge Unit Demand (M)
Tank based cartridges are much larger in Europe due to the strength of Epson and Canon. In addition, the emerging brands (Brother, Kodak) both use tank based systems, and even newer Lexmark models are switching to tanks. As a result, tank based cartridges are expected to increase their share over the coming years.

32. U.S. Aftermarket Share of Inkjet Cartridge Units
Some significant shifts were seen in 2007 when Epson suceeded in getting the ITC injunction. Around the same time HP’s agreement with Staples also saw their AM share impacted, and Canon’s shift to integrated cartridges and use of encrypted chip technology also had a visible impact on their loss to AM.

33. Western Europe Aftermarket Share of Inkjet Cartridge Units
Less volatility in Europe – Canon has succeeded most due to their introduction of integrated carts and encrypted cartridges…..Brother have seen an increased loss over time as their installed base has increased, and they now present a more sizeable opportunity. Lexmark’s loss to AM has also increased over time as their installed base has aged as they have reduced the number of new printers they are bringing to market.

34. U.S. Aftermarket Share of Inkjet Cartridge Units
Here we clearly see the effect that the Epson ITC……

35. U.S. Inkjet Aftermarket Product Types
Integrated Cartridges
While you wait cannibalising other AM solutions rather than impacting on the OEM share

36. U.S. Inkjet Aftermarket Product Types
Ink tanks
Growth in Reman driven by transition of Epson product away from new build……again while you wait impacting upon other AM rather than OEM

37. Western Europe Aftermarket Share of inkjet Cartridge Units
In Europe the aftermarket share of tanks has declined but is expected to recover slightly over time. On integrated cartridges the AM share is likely to decline slightly as Lexmark becomes a less important player, and the average moves more in favour of HP

38. U.S Inkjet Cartridge Channels 2009 Share of Units
Aftermarket in US heavily reliant on Internet channel……Retail channel only stocking most popular SKUs/brands to maximise shelf space

39. Q48: Inkjet Cartridges Typically Purchased for Inkjet PRINT Devices
Which type of inkjet cartridges does your company typically buy for your inkjet printers or multi-function devices?
N =

40. Q54: Whether Inkjet Cartridges are Refilled
For the non-OEM, refilled, remanufactured, compatible inkjet cartridges that you use.
N =

41. MPS Impact on Supplies and our evolving need to print

42. Reasons for Office Printing
Emerging
Rapid
Growth
Peaking
Declining
Fading
Read and Discard
Temporary Reference
Printing Growth
Transactions
Collaboration/Editing ?
Archival/Storage
Time

43. Document Printing Migration and Losses
Short run color
Variable data
Conventional
Print
Photo Books
On demand
Marketing
Mobility
Social Media
Promotional
Production
Digital
Newspapers
Forms
Magazines
Invoices
Office
Print
Statements
Reports/Memos

44. Office Document Printing Lifecycle
Emerging
Rapid
Growth
Peaking
Declining
Fading
Contracts/Legal Docs
Forms/Invoices
Engineering Docs
Printing Growth
Web Pages
Financial Reports
Maps
Proposals
Spreadsheets
/Memos
Color Brochures
Presentations
Marketing
Collateral
Reports
Mobile?
Newsletters
Social Media?
Time

45. U.S. MPS Market Forecast $M

46. U.S. MPS Share of Supplies Market $M at Final point of Sale – Supplies in Office Environment (Excludes Home and Production)

47. Percentage of Money Initially Saved by Assessment
U.K. France, Germany
N =
Respondents who are currently engaged in MPS

48. MPS disrupting the supplies market
Less print in the workflow
More duplex printing
Lower cost per page
Migration to more cost effective devices
Cost pressure across all classes of office devices
Increased use of 3rd party supplies
Controls on color
Cost per coverage pricing model?
Disruptions in the distribution channel

49. Distribution Issues MPS impact on the channels?
Who will lose who will win the business as it shifts under an MPS plan
All suppliers need to position for MPS
What is the role of the contract stationer in MPS?
What is the role of the internet specialist?
Distributors?
How does MPS change supplies buying and delivery?

50. U.S. MPS Impact on Supplies 2010
Level of MS Service
Channel Legacy of MPS Provider
End User Organization Size

51. Mean Importance of Criteria in Choosing to Engage in Managed Print Services – Total (Q.26) (1)
Q.26: Rate the importance to each of the following criteria to why you chose to engage in Managed Print Services? (1 to not important to 5 extremely important)
Extremely Important
Not Important
N = 439
U.K. France, Germany

52. Importance of Criteria for Engaging in Managed Print Services (1)
Rate the importance to each of the following criteria to why you chose to engage in Managed Print Services?
U.S MPS Study
Not Important
Very Important
N = 343
Source: Professional & Managed Print Services Multi Client Study

53. Current Types of Supplies Companies Are Getting Through MPS Services (Q.88)
Q.88: What types of supplies are you currently getting through your MPS services?
U.K. France, Germany
N = 208
Respondents who are currently engaged in MPS

54. Type of Supplies Received Through MPS Services
What types of supplies are you currently getting through your MPS services?
N = 157 Respondents involved or familiar with Managed Print Services who are currently using Managed Print Services for their company
U.S MPS Study
Source: Professional & Managed Print Services Multi Client Study

55. General Category of Supplies Company Opt to Use More of
What general category of supplies did your company opt to use more of as a result of its document assessment?
N = 76 Respondents that have used/is using document assessment software or has engaged in some sort of consulting services
U.S MPS Study
Source: Professional & Managed Print Services Multi Client Study

56. Marking Supplies Distribution Channel Share
100%
90%
Other Channels
80%
Internet Specialist
Other Consumer Retailer
70%
Which channels will
make way for MPS?
Paper Merchant
Hardware Vendor Direct
Forms MFR/Dist.
60%
Direct Mail Catalogs
Warehouse Clubs
50%
Computer Superstore
MPS
Office Superstores
40%
Printer Dealers
BTA
30%
IP Specialist
Small BPIA
20%
Contract Stationer
10% 0%
2006
2007
2008
2009
2010
2011

57. Green/Environment

58. Importance of Environmental Features When Making the Decision to Purchase Printer Products
How important are the following environmental features when making the decision to purchase printer products for your business?
N = 319

59. USA: OEM Toner Cartridge Return Programs
Company
Program Name
Year Began
Canon
Canon’s Toner Cartridge Return Program Recently expanded
1990
Dell
Use and Return Program
2003
Epson
Epson Toner Recycle Program
2005 HP
Planet Partners
1991
IBM
IBM Printer Supplies Return Program
2001
Lexmark
Lexmark Cartridge Collection Program
1996
Ricoh
Used Toner Cartridge Collection Program
1995
Samsung
STAR (Samsung Take Back and Recycling Progam)
2008
Toshiba
Close the Loop’s “Zero waste to Landfill” recycling program
Xerox
Green World Alliance
1960s

60. USA: OEM Inkjet Cartridge Return Programs
Company
Program Name
Year Began
Dell
Inkjet Recycling Program
2003 HP
Planet Partners
1998
Epson
Ink Cartridge recycling program
Lexmark
Lexmark Inkjet Cartridge Return Program (Close the Loop)
1996

61. Environmentally Responsible Printer Brands
Please indicate which of the following printer/printing brands are best described by the following statements: 'is environmentally responsible'
N = 319

62. USA and W. Europe Remanufacturer Laser Cartridge Flows
20% are Collected again
~74% Good*
Remanufactured
= Recollect
only 15% of
cartridges
needed
85% fall out
of the loop
~26% Bad*
Recycle or Landfill
80%
Land Fill

63. USA and Europe Remanufacturer Inkjet Cartridge Flows
14% are Collected again
~70% Good*
Remanufactured
= Recollect
only 10% of
cartridges
needed
90% fall out
of the loop
~30% Bad*
Recycle or Landfill
86%
Land Fill

64. U.S. What happens to Cartridges/components that remanufacturers collect but can’t use or sell?

65. Update on Legal Issues

66. Patents and Intellectual Property
OEMs are increasing their vigilance to protect their intellectual property
Increasing pace of lawsuits and actions through the US Government International Trade Commission to receive damages, court injunctions or exclusion orders to protect against product that infringes intellectual property
We expect that US based vendors and resellers will develop a heightened concern about new-build supplies especially those made in China.

67. Companies Involved in Recent Suits with Lexmark, HP, Canon or Epson
Ninestar Technology Company, Ltd. ●
Ninestar Image Co. Ltd. (a/k/a Ninestar Technology Co., Ltd.)
Ninestar Image Int’l Ltd.
Acecom Inc.-San Antonio d/b/a Inksell.com
ACM Technologies, Inc.
Copy Technologies, Inc.
Direct Billing International Incorporated d/b/a Office Supply Outfitters and d/b/a The Ribbon Connection
Print-Rite Holdings Ltd.
Nano Pacific Corporation
Nectron International, Inc.
Mipo International Ltd.
Comptree Ink d/b/a Meritline ABCInk, EZ
Printer Essentials.com, Inc.
Mextec d/b/a Mipo America Ltd.
Seine Image International Co., Ltd.
Town Sky Inc.
Zhuhai Gree Magneto-Electric Co. Ltd.
Ziprint Image Corporation

68. Companies Involved in Recent Suits with Lexmark, HP, Canon or Epson
123 Inkjets.com ●
Jahwa Electronics Co., Ltd.
123 Refills, Inc.
John Does 1-20
Abacus 24-7 LLC
L2 Commerce, Inc. d/b/a PrintMicro.com
ABCCo.net, Inc.
Laser Toner Technology, Inc.
AcuJet
LD Products, Inc.
All Amedia Outlet Corp. d/b/a Inkandbeyond.com
Linkyo Corp. d/b/a Supermediastore.com
Alpha Image Tech
Master Ink Co., Ltd.
Apex Distributing Inc.
Media Street Inc. d/b/a mediastreet.com
Artech GmbH
MicroJet Technology Co., LTd.
Asia Pacific Microsystems, Inc.
Mipo Science & Technology Co., Ltd.
Aurora Eshop, Inc. d/b/a butterlyinkjet.com
Mipo Technology Limited
Butterfly Print Image Corp. Ltd.
MMC Consumables Inc.
C&R Services, Incorporated d/b/a C&R Distributors and C&R Distributing
Ninestar Japan Co.
Cartridge Hut and Paperwork Plus
Ninestar Management Co., Ltd.
Cartridges R Us, Inc.
OHM Electric Inc.
Chung Pal Shin
Ourway Image Co., Ltd.
Clickinks.com, LLC
Polek & Polek Inc.
Color Creation Inc.
Price-Less Inkjet Cartridge Co.
Compu-Imaging, Inc.
PTC Holdings Limited
Copylite Products Corp.
Quality Cartridges, Inc.
Dataproducts USA LLC
R & L Imaging Group, Inc. formerly known as IEM Consumables, Inc.
Eforcity Corporation d/b/a Eforcity.com
Red Powers, Inc.
EIS Office Solutions, Inc.
REV Corporation
E-Toner Mart, Inc.
Ribbon Tree (USA) Inc., dba Cana-Pacific Ribbons Inc.
Futurewell Holding Limited
RibbonTree (Macao) Trading Co., Ltd.
Gerald Chamales Corp., d/b/a Rhinotek Computer Products
Shanghai Angel Printer Supplies Co. Ltd.
Global Business Support Systems, Inc. d/b/a Printcountry.com
Shenzhen Print Media Co., Ltd.
Glory South Software Manufacturing Inc.
SinoTime Technologies, Inc. d/b/a All Colors
Huizhou Jahwa Electronics Co., Ltd.
SmartOne Services LLC d/b/a InkForSale.net
IJSS Inc., d/b/a TonerZone.com Inc. and d/b/a Inkjet Superstore
Tatrix International
Ink Lab (H.K.) Co. Ltd.
Tully Imaging Supplies Ltd.
Ink Tec America Corporation
Union Technology Int’l (M.C.O.) Co. Ltd.
Ink Tec Co. Ltd.
Virtual Imaging Prouducts Inc.
Ink Technologies Printer Supplies, LLC d/b/a Ink Technologies LLC
Wellink Trading Co., LTd.
Inkjetmadness.com d/b/a inkgrabber.com
XP Solutions Properties, LLC d/b/a Clickinks.com
Inkjetwarehouse.com Inc.
XSE Group, Inc.
InkPlusToner.com
Zhuhai National Resources & Jingjie Imaging
IowaInk, LLC d/a/b iowaink.com
Zhuhai Seine Technology Co., Ltd.

69. Q55: Opinion on Counterfeit Cartridges
Do you believe that there is a lot of counterfeit toner and inkjet cartridges in the market?
N =

70. Q56: Counterfeit Cartridges Causing Problems
Do you believe that counterfeit toner and ink cartridges present a problem for your company?
N =

71. Summary US and WE are flat with potential for slight revenue growth
MPS is a threat to the supplies market growth
MPS likely increases aftermarket share and disrupts the channels
Green is of growing importance but may have the PR edge
Legal is moving into high gear