This Month's Spectrum Summary:

(The following is an excerpt from the February 2005 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2005)

Rethinking Wide Format Market Segmentation
Unveils A Rich Lode of New Users

Changing realities prompt us to meet with Patti Williams and Marco Boer to look at the impact on the wide format market. Factors such as ever lower hardware pricing, narrower format "mid-size" printers, and digital photography have extended the Wide Format market far beyond the original print-for-pay (PFP) market. There are huge numbers of new and potential users that don't fit into the Wide Format product classifications used to date, namely PFP, Industrial, and Corporate.

Examples include photographers, museums and fine artists. Many already have Wide Format printers, but these users are not PFP. Rather they sell the content; the print is just the vehicle. This is true also for a consulting company like I.T. Strategies which has a Wide Format printer. This also is run as a vehicle for content. So each installation does not represent a big supplies annuity, but together they will be accounting for more and more printer sales. Our challenge right now is to identify and begin to track these hidden markets. Lumping them in with PFP, which have high utilization rates, would skew the data.

Now in process here is a new set of market segmentation charts for Wide Format, showing additional levels. It helps to go down to very specific types of users in order to focus marketing in this emerging, diffused market. Printer design doesn't need to be aimed at specific kinds of users. Current models are already suitable for most. The challenge is to find the users. "Grass roots" marketing is needed.

The Epson Stylus 4000 is significant in that it addresses these kinds of users with its unique 17-inch print width and lower purchase cost. An economy printer such as this could cannibalize the market for larger printers, but we believe this will be more than offset by access to entry-level buyers. In many cases, entry level buyers, for narrow format as well as this new, intermediate level, are likely to trade up to a larger printer from the same vendor in the future.

Much of this growth is seen driven by digital photography. Utilization will grow as users become more familiar with the potential and adapt to the convenience of wireless transmittal and downloading.

This looks like the birth of a major new Wide Format product category, introducing a forecasting problem. Instead of just wide and narrow format, it seems logical to add a new mid-size, but not until more vendors are participating since as a policy we don't publish data on any printer category with just one printer.

The introduction of printers targeting these new kinds of users is just one aspect of the larger trend toward shorter product life cycles and model proliferation. This helps vendors but makes it hard for third party after-market competitors to keep up. It may also pose a growing problem for retailers attempting to stock an ever growing population of print cartridges and media. One answer may be more vendors turning toward the Internet, the strategy that seems to be working so well for Dell.