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Home >> Digital Print Equipment Grows At Retail; Is Printing Next?
While current industry statistics show digital image printing at retail to be anemic, InfoTrends says the outlook is far healthier than the numbers would indicate, at least from the equipment side.
A new study produced by the market research firm predicted that digital minilab sales will experience a compound annual growth rate (CAGR) of 15 percent through 2007. About 30 percent of all minilab installations in North America are already digital; by the end of the forecast period, that number will expand to nearly 97 percent.
Photo kiosks sales are expected to fare even better, demonstrating a CAGR of 16 percent over the forecast period (2002 to 2007).
This growth will occur despite general consumer reluctance to produce prints at retail. According to the most recent statistics from PMA, about 90 percent of digital-camera owners who made prints of their digital images did so at home, and those numbers haven't changed dramatically since 2000.
However, laying the groundwork for a groundswell of digital printing at retail is a wise investment, says Kerry Flatley, senior research analyst at InfoTrends, based here, who suggested the current statistics are misleading.
"What we've seen is the behavior of the early adopter and not of the mass-market consumer, which is only now getting into digital thanks to falling prices and easier-to-use models," Flatley said.
Once digital cameras fall into more hands, especially suburban soccer moms used to dropping off film at retail, the printing habits will trend away from the home, Flatley said.
"The photo kiosk and digital minilab markets continue to be strong as major retail chains gear up for the influx of digital camera users over the next few years," Flatley said.
Leading the digital minilab installation charge are large national retailers such as Wal-Mart, Ritz Camera and Walgreen, Flatley said. All three chains are Fujifilm partners and use the company's Frontier digital minilab, which explains the vendor's position as market-leader in digital minilabs with over half of the installed base in the United States, according to InfoTrends.
Flatley expects competition from Noritsu and Kodak in the digital minilab market will erode Fujifilm's large margin of dominance in the forecast period.
The kiosk business is more varied, with a number of channels embracing the solution as a lower-cost alternative to full-blown digital minilabs, Flatley said. Consumer electronics retailers are particularly interested in this method, Flatley noted, and many are testing kiosks in stores. Circuit City is currently testing a digital printing kiosk from Lucidiom in an undisclosed number of stores.
The kiosk, Flatley said, is "a key bridge to growing retail printing."
"Kiosk sales have been unexpectedly spurred by the weak economic climate, as some struggling retailers opt for inexpensive kiosks over minilabs in the short term," Flatley said.
Kodak and its Picture Maker kiosk is the current leader in installed kiosks, according to Flatley, with about 60 percent of the market. Sony, which recently landed a deal with Kinko's to place its Digital PictureStation kiosks in about 800 Kinko's locations (beating out previous Kinko's partner Kodak) is rapidly making headway into the kiosk market, riding the coat-tails of its market-leading digital cameras, Flatley said.
Sony has also found success in alternative channels, like college bookstores, where its brand fares better than other kiosk competitors, Flatley said.