Hewlett-Packard Co. (HPQ) kept its crown intact, as the information technology (IT) research firm IDC announced the Palo-Alto-based tech giant to have maintained its leadership position in Managed Print Services (MPS).

The comprehensive research report indicates that H-P’s market leadership is based on its ability to deliver a unified experience across the office, onsite production and external printing and imaging environments. Its broad portfolio is enriched with industry solutions and features including HP ePrint, the Open Extensibility Platform (OXP), and FutureSmart firmware. These innovations allow customers to easily update, manage and extend the capabilities of their printers with the latest solutions and applications.

As a new branch of the printing business, MPS is attracting major industry players. Another research firm Gartner sees this as the service provider’s capability to take the primary responsibility for meeting customers’ office printing needs, including printing equipment, supplies, service and overall management.

Despite, H-P’s leadership in the MPS vertical, we believe that the company could be encountered with stiff competitive pressure from Lexmark International Inc. (LXK). Lexmark has entered into the MPS business in a big way. Within the last 24 months, Lexmark won 23 new MPS contracts with companies listed on either the Global 500 or Fortune 500 list.

Printing solutions providers operate in a highly competitive market. So there is a constant price war among major players to snatch market share from one another. The market is narrowing as digital technology and e-commerce become more prevalent.

H-P is a significant player in the printing market. Despite H-P’s market leadership, the IPG (Imaging and Printing Group) segment did not perform well in the last quarter. IPG revenue dropped 1.3% year over year to $6.09 billion, driven by lackluster performance mostly in all the sub-segments.

Currently, H-P and Lexmark now has a short-term Hold recommendation (Zacks #3 Rank).

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