1. Print & Roll: Find Out Where the Action
Is in the EMEA Consumables Market
EMEA = Western Europe, Central & Eastern Europe, the Middle East, and Africa
Joanna Pupkowska, Program Manager, Consumables (EMEA)
Mario Lombardo, Senior Research Analyst , Western Europe
Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

2. Covered today....
1. Consumables Research Program: Research Background &
Methodology Overview
2. Consumables Market Crisis Implications
3. Consumable Developments: Future Assumptions
© IDC Source:/Notes: Jun-10 2

3. Consumables Research Program: Research
Background & Methodology Overview
IDC consumables tracker is run in 17 EMEA markets on a biannual basis.
Product coverage:
- Inks & toners: cartridges, bulk ink/toner, ink/toner refill kits, CISS
- Excluded from the research: developers, fusers, printing heads, printing drums
Market segments:
- Original
- Compatibles
- Refillers
- Counterfeits
Information sources:
1. Shipment data reported by vendors on a consumables SKU level (both local & HQ offices approached for
data);
2. Qualitative feedback from local OEM offices on the size of specific market segments (e.g., addressing local
Brother vendor office with a question on threat from local Brother compatibles)
3. End-user study results (e.g., asking end users about the share of original consumables in their total purchase
volumes)
4. Quantitative sales data reported by IT distributors on an SKU level (both local distributors’ subsidiaries and
HQ offices approached)
5. Consumable market modeling based on detailed information on hardcopy peripherals installed base (broken
down per OEM brand, speed segment, and technology)
6. Feedback from refillers and from distributors most strongly involved in parallel import/export activities with
regard to consumables
© IDC Jun-10 3

4. Consumables Market Crisis Implications
#1 In 2009, most OEMs reported significant drops in sales of original consumables, with toner sales
having suffered most.
#2 OEM falls in value terms were smaller than the decrease in volume due to OEM price increases.
#3 Average consumption rate per device dropped in both ink and toner segments in response to
saving measures adopted among both home users and business users.
#4 With printing infrastructure renewals being held back in 2009, vendors face an old installed base..
#5 Compatibles thrived in the worsening economic climate, with all EMEA markets reporting
significant increases in sales of compatibles.
#6 While compatibles increased across the whole of EMEA, the performances of third-party refilling
services varied across the region.
#7 Counterfeit supplies present little danger to vendors in Europe, yet they are a threat in the Middle
East.
© IDC Jun-10 4

5. #1 Overall Consumables Sales Drop
 Overall consumables consumption started tumbling at the end of 2008, leading to a 12.2% drop in H1
2009 vs. H1 2008 in EMEA.
 The observed drop in transactions resulted from printing reductions, business downsizing, slashed IT
investments.
 Toner unit sales dropped by 11.7% year-on-year in 2009; OEM sales were down 20.6%.
 Ink sales dropped 6.8% year on year in 2009; OEM sales were down 16.7%.
• The market for ink consumables peaked in 2007 and declined in 2008 and 2009 year on year.
• The slight rebound seen in 2H 2009 is of no great significance.
• The market launch of more single-color ink tanks inflates unit volumes.
 Figures vary widely by geography and vendor.
Overall EMEA Consumables Market EMEA OEM Consumables Market
180 120
Million Units
Million units
160
100
140
120 80
100
Ink Ink
60
80 Toner Toner
60 40
40
20
20
0 0
1H 2008 2H 2008 1H 2009 2H 2009 1H 2008 2H 2008 1H 2009 2H 2009
© IDC Jun-10 5

6. #2 OEM Drop in Value Smaller Than Fall in Volume
 In terms of value, the overall EMEA consumables market shrank by 9.3% year on year in 2009.
 OEM price increases were observed particularly at the end of 2008 and in H1 2009
• Ink price: up 13% on average retail price in € countries in H1 2009 year on year
• Toner price: up 18% on average retail price in € countries in H1 2009 year on year
• $ trend impacted prices
 OEM ink revenue fell by 18.1% year on year in 2009 in EMEA.
 OEM toner revenue fell by 8.1% year on year in 2009 in EMEA.
 OEM revenue decreased far more sharply in CEE countries – ink and toner revenue down by more than
-30%.
 The impact on the use of third-party supplies was substantial.
© IDC Jun-10 6

7. #3 Average Consumption Rate Drop in Ink & Toner
 The ink consumption rate is slowing in most EMEA markets.
 Average volumes for ink printing are slowing – -20% year on year in 2009.
 Home photo printing is not a strong driver.
 The toner consumption rate has slowed consistently throughout EMEA.
Ink Consumption Rate Toner Consumption Rate
3,50
7,00
3,00
6,00
2,50
5,00
2,00
4,00 2008
2008
1,50 2009
3,00 2009
2,00 1,00
1,00 0,50
0,00 0,00
WE CEE MEA WE CEE MEA
© IDC Jun-10 7

8. #4 Vendors Facing Old Installed Base Due to Delayed
Printing Infrastructure Renewals in 2009
 IT investments have been slashed across all EMEA verticals.
 An old installed base has many implications for OEM vendors:
 A slowdown in the transition from SF to MFP
 A slowdown in color adoption
 Less control over installed base and users = more difficult to ship consumables
 More cheap alternative supplies available for older printers
 Although the recession has had a huge impact on large organizations, IDC’s SMB Purchasing Behavior
in WE: Post Financial Crisis survey revealed little impact on SMBs; 32% of SMBs delayed print
hardware purchases.
Over the past 12 months, has senior management decided to hold
back on purchasing new printing devices?
100%
90%
80%
70%
60%
50%
No
40%
Yes
30%
20%
10%
0%
© IDC Jun-10 8

9. #5 Significant Increase in Compatible Sales Across All EMEA
Markets Due to Worsening Economic Climate
 The EMEA consumables ink & toner market reported an 8.3% decline in volume year on year in 2009
and an 9.3% drop in value. Despite the overall decline across EMEA, some markets saw increases in
volume ,with end users encouraged by the increased availability of cheap alternative supplies (e.g., in
Ukraine and Turkey).
 While shipments of OEMs dropped by 17.9% in volume across EMEA, performance of many compatible
brands improved, with ink compatibles growing by 21.1% and compatible toners by 13.0% year on year.
The originals vs. compatibles sales-volume gap has been narrowing over the last two years, the trend
being boosted by the crisis. In H2 2009, the share of compatibles of the total consumables market stood at
27.6%, as compared with only 19.5% in H1 2008.
EMEA Ink Consumables Market Size (Volume) EMEA Toner Consumables Market Size (Volume)
60,00
120,00
Millions
Millions
100,00 50,00
80,00 40,00
60,00
30,00
40,00
20,00
20,00
10,00
0,00
H1 2008 H2 2008 H1 2009 H2 2009 0,00
1H 2008 2H 2008 1H 2009 2H 2009
Original Inks Compatible Inks Original Toner Compatible Toner
© IDC Jun-10 9

10. #6 Varied Performances of Third-party Refilling Services
Across the Region
Refilling services are on the decline in many markets, despite increasing demand for alternative supplies.
Refillers are losing market share to cheap new compatibles produced in the Far East.
Although ink and toner refilling services increased in volume terms in H2 2009, the importance of refilling
by third parties is expected to decline in the long term.
Ink refilling in 2009: Western Europe = 6.9%; Middle East & Africa = 11.4%; Central & Eastern Europe =
24.8%. The bulk of CEE refilling market volume results from Russia and Ukraine, which accounted for
85.3% of CEE ink refilling market volume.
Toner refilling in 2009: Central & Eastern Europe = 39.5%; Middle East & Africa = 9.3%; Western Europe
= 3.4%. Ukraine & Russia accounted for 90.9% off CEE refilling toner market.
Ink refillers Toner refillers
18 500 000 9 600 000
18 000 000 9 400 000
17 500 000
9 200 000
17 000 000
9 000 000
16 500 000
16 000 000 8 800 000
15 500 000 8 600 000
15 000 000 8 400 000
14 500 000
8 200 000
14 000 000
8 000 000
13 500 000
1H 2008 2H 2008 1H 2009 2H 2009
1H 2008 2H 2008 1H 2009 2H 2009
© IDC Jun-10 10

11. #7 Counterfeit Supplies of Little Danger in Europe Yet a
Threat in ME
 Counterfeits in the Middle East markets accounted for 3.7% of market volume in 2009, as compared with
2.2% in CEE and 0.5% in Western Europe.
 Middle East: UAE = 5.8%; Saudi Arabia = 5.9%.
 The popularity of counterfeits is constantly decreasing as a result of:
 OEM vendors’ anti-counterfeit programs
 Growing end-user awareness
 Availability of cheaper good-quality compatibles, offering users more options when it comes to attractively
priced supplies
© IDC Jun-10 11

12. Consumable Market Forecast:
IDC Assumptions
#1 Economy showing first signs of recovery in 2010 & 2011 will boost original supplies sales.
#2 OEM vendors are expected to curb increasing popularity of third-party consumables.
#3 Demand for color printing in the business sector will continue to rise.
#4 Growing adoption of MPS and pay-per-click contracts will enable better control over printed
outputs.
#5 The share of laser devices in the overall hardcopy peripherals installed base will rise, thus
increasing toner sales.
#6 Consumables value is expected to show growth in 2010–2014.
© IDC Source:/Notes: Jun-10 12

13. #1 Economic Recovery in 2010 & 2011 to Boost Sales of Original
Supplies
 Original vendors are unlikely to regain historical market shares.
 Compatibles will lose some market share after the crisis, but those compatibles vendors that managed to
establish strong market presences in the crisis years will perform well.
Ink market is expected to develop at CAGR of 1.4% over 2010-2014 while toner market is forecast to grow
at 3.4%.
Ink market forecast 2010-2014 Toner market forecast 2010-2014
325,00 200,00
320,00
315,00 150,00
Millions
310,00
Millions
305,00
300,00 100,00
295,00
290,00 50,00
285,00
280,00 0,00
© IDC Jun-10 13

14. #2 OEM Vendors Expected to Curb Increasing Popularity Of
Third-party Consumables
Original vendors will intensify efforts to win back some of the lost market shares, fighting third-party
consumables vendors through the following:
 Product strategy: a focus on cost-efficient multipack products and single-color tanks
 Development of programs for collecting empty cartridges
 Legal undertakings: patent-infringement disputes
 Quality awareness campaigns
© IDC Jun-10 14

15. #3 Rising Demand for Color Printing in Businesses to
Continue
 OEM color laser adoption in the office slowed through the downturn, causing a fall in color toner in 2009
year on year.
 However, the percentage of color of total toner sales grew to 31% in 2009 from 26% in 2008.
 Many color applications were not axed through the downturn.
 The color laser installed base is expected to expand at a CAGR of approximately 14% across the 2010–
2014 period, with color toner expected to show similar growth.
 CEE and MEA countries will experience much greater growth than WE.
 Cost-per-copy contracts and MPS will continue to drive color printing.
EMEA OEM Toner Sales by Color
100
Million units
90
80
70
60
50 Color
40 Black
30
20
10
0
2008 2009
© IDC Jun-10 15

16. #4 Growing Adoption of MPS and Cost-Per-page Contracts
 The downturn has been a mixed blessing for MPS providers, with many cuts but also saving measures
(public sector, finance, manufacturing, …).
 The need for print rationalization will continue to drive MPS demand.
 MPS proliferation in the SMB and large-business segments will inevitably reduce related hardware and
supplies growth.
 The structure of the consumables distribution channels will be impacted in the long term, moving
toward a services business model.
 A gap will open up between the distribution channel for large businesses and that for SMBs.
 Hardware and supplies businesses will separate.
WE SMB: Generally, how do you pay for your hardware
 MPS will be effective in combating third-party supplies. devices?
 Transactional sales (non-credit or non-lease based)
will decline. 90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
<10 10-99 100-249 250-499
employees employees employees employees
Transaction Credit deal Lease Managed contract
© IDC Jun-10 16

17. #5 Rise in Laser Devices’ HCP Market Share to Trigger
Toner Sales
 The transition from inkjet to laser is happening in low-speed segments:
• Slowdown in inkjet print volumes: -20% year on year in 2009
• IDC figures indicate market maturity
• Market launch of more single color ink tanks inflating unit volumes
• Ink market in need of shake-up: new business models to be offered
 Demand for high-yield toners and multipacks will continue.
WE SMB: Perceived Barriers to Business Inkjet Adoption?
70%
60%
Purchase price
50%
Consumable cost
40% Output Quality
Output speed
30% No duplex copying / printing
Reliability
20%
Noise
10% Other
0%
TOTAL <10 emplys 10-99 100-249 250-499
© IDC Jun-10 17

18. #6 Consumables Value Expected to Show Growth in
2010–2014
 The consumables market is still very unstable, but recovery is close.
 Vendors are managing to keep revenues steady year on year, but only through price increases.
 Rationalization of printing infrastructure will increase pressure to lower the cost per page.
 The market will show growth in value in 2010–2014.
 Toner: Growth in value will be higher than unit growth as a result of price increases, higher-yield
cartridges, and more multipacks.
 The currency trend will continue to work against end users. (U.S.-based vendors benefit from the
U.S. dollar trend, but they adjust prices in case of lower revenues.)
© IDC Jun-10 18

19. Thank you for your attention…
Please see also other of our reports:
 Quarterly Hardcopy Peripherals Tracker
 Hardcopy Peripherals Qualitative Reports (Analysis, Forecast, and Vendor Profiles)
 Managed Print Services (End-User Survey Study)
 Outsourced (In-house) Print & Doc Services (Market Sizing & Vendor Share)
 Verticalization of the Hardcopy Peripherals Market
 Hardcopy Peripherals Installed Base
 Hardcopy Peripherals Page Volume and Value
 IT Spending per Vertical
© IDC Jun-10 19

20. Any questions?
We would be happy to receive feedback from you!
Please contact us:
Joanna Pupkowska
Program Manager
Consumables (EMEA)
E-mail: jpupkowska@idc.com
http://twitter.com/jpupkowska
tel.: +48 22 548 40 52
Mario Lombardo
Senior Research Analyst
Hardcopy Supplies (Western Europe)
E-mail: mlombardo@idc.com
tel.: +44 (0)208 987 7239
© IDC Jun-10 20