Trends in Digital Color Print

Color printing continues to drive the production digital print market and will be the most important overall trend in coming years.

By Jim Hamilton

Surveys by InfoTrends, a market research and strategic consulting firm, confirm that digital color printing 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 feed off one another, driven by applications such as direct mail, transpromotional documents and on-demand books, which are facilitated by web-to-print tools. With cost reductions, productivity enhancements and improved workflows, InfoTrends anticipates significant volume increases in color printing over time.

Universal Production
Universal copier/printers (UCPs) have the ability to economically print black-and-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 its November 2005 study, entitled “The Evolving U.S. Digital Color On-Demand Printing Opportunity,” InfoTrends found that monochrome volume on color devices is already significant.

This research shows that about a quarter of all black-and-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-and-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 percent of black-and-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-and-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-and-white and process color. One major exception has been HP Indigo, which 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-and-white documents.

Vendors of cut-sheet black-and-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 one million impressions per month.

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, find 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.

More than 75 percent 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 percent of the 24 to 40 ppm category and 61 percent of the 41 to 59 ppmm category) were placed in office/workgroup 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-plus 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. Duty cycle is a measure of the highest print volume that a device is capable of running. In other words, it’s 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 less-than-100,000 ppm 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 one million-plus ppm 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 one million-plus ppm duty cycle segment experienced solid growth in 2006, spurred by the strong success of the HP Indigo product line. With nearly 50 percent growth in placements, HP Indigo was able to pass Xerox and take the lead in market share with nearly 42 percent. Xerox showed moderate growth and was thereby able to retain nearly 33 percent of the market. InfoTrends counts Xerox’s high-end DocuColor printers such as the DocuColor 500, 7000, and 8000 in the 100,000 to one million ppm category. Kodak NexPress, Punch Graphics Xeikon, and Kodak Versamark make up the remaining share.

Digital Production Color Directions
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’s 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 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.

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 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?
drupa 2008, May 29 to June 11, 2008 in Düsseldorf, Germany, will soon weigh heavy on the minds of vendors and print service providers. The months leading up to the show will buzz with announcements and vendors courting their best customers with “private” previews. As is evident from the trends discussed in this article, digital color will certainly play a key role at drupa. And yet hardware is only part of the story. InfoTrends sees the key to success in a combination of strong digital printing hardware and effective workflow solutions software, supported by solid business plans and business development tools. The future is bright, and it is one that is built on color applications that bring new value to print customers.

This article is reprinted from the April 2007 issue of PERF Report, a newsletter focused on industry-specific research. Visit www.theperf.org.