Operating conditions for the printing business are getting increasingly challenging. The weakness is driven by both corporate and retail customers who are moving towards a paperless office, in order to reduce the cost of stationery. Research firm IDC projects the number of printed pages worldwide will decline to 1.47 trillion in 2009 from 1.50 trillion in 2008.
As a result of this bleak outlook, printer manufacturing companies like Hewlett-Packard (HPQ), Xerox (XRX) and Lexmark International (LXK) are transforming their printing business through new products with enhanced features. These new age printers, when linked to online services, enable direct access to data from websites, which can then be printed accordingly.
The first all-in-one printers and copiers that came into existence a few years back included web-browsing capabilities. Later versions also included touchscreen controls that made them more user-friendly.
We are particularly impressed with two new offerings by Hewlett-Packard and Lexmark. The new Photosmart printer from Hewlett-Packard comes with new offerings for consumers. In addition to new applications from Google Inc. (GOOG) and Nickelodeon (VIA) among others, it will enable the viewing of movie trailers on the printer screen and the purchase and print of tickets. The printer can also upload digital photos directly to websites.
Lexmark’s model has relatively fewer features. The company has included touchscreen that helps navigate through functions such as copy, scan and fax.
Even after considering all the enhancements made in the new age printers, we believe that the number of printed pages is not likely to increase significantly, as a hard copy print out will be costlier than a soft copy version. However, we do believe that these new features have the potential to attract customers thus increasing the importance of the product to an extent.
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