Nowadays printers are no longer supplied with the vast majority of PCs, and the total available market (TAM) of hardcopy peripherals is shrinking. As is the case with these markets, consolidation occurs and another company has decided to leave the market: HP this week has announced plans to acquire Samsung’s printer business. The move is going to strengthen HP’s positions on the market of laser printers, multi-function printers (MFPs) and improve its abilities to compete against copiers. In addition, HP will increase its market share and retain its No. 1 position on the market.

HP intends to pay Samsung $1.05 billion for the latter’s printer business and acquire a portfolio of intellectual property that includes 6,500 printing patents. In addition, the company will get around 1,300 researchers and engineers with advanced expertise in laser printer technology, imaging electronics, as well as printer supplies and accessories. HP claims that the acquisition is expected to bring cost synergies and a “strong” financial model, but right now the company does not share its plans regarding optimizations of its printing business workforce or anything related.

The future of HP’s and Samsung’s hardcopy products is unclear because both HP and Samsung have comprehensive portfolios of printers and MFPs and their product lines clearly overlap. HP praised the importance of Samsung’s A3 MFPs, which compete against copiers among other hardcopy devices, and promises to integrate Samsung’s products into its lineups. However, due to natural reasons the companies do not share exact plans. At present HP uses Canon’s technologies to build some of its MFPs as well as some other products, whereas Canon services them. The two companies intend to keep the partnership going forward.

Worldwide Hardcopy Peripherals, Unit Shipments,
Market Share, and Year-over-Year Growth, 1H 2016
Data by IDC
  1H 2016 1H 2015 1H 2015
->
1H 2016
Shipments Share Shipments Share Change
HP 16,862,131 36.45% 20,123,018 40.32% -16.20%
Canon 9,287,674 20.08% 9,314,253 18.66% -0.29%
Epson 7,939,135 17.16% 7,604,826 15.24% +4.40%
Brother 3,477,553 7.52% 3,714,683 7.44% -6.38%
Samsung 1,929,694 4.17% 2,352,128 4.71% -17.96%
Others 6,765,469 14.62% 6,798,726 13.62% -0.49%
Total 46,261,656 100.00% 49,907,634 100.00% -7.31%

As individuals acquire more smartphones and tablets, whereas organizations replace paper documents with digital documents, the TAM of printers and MFPs is deteriorating. Nonetheless, it is still big: in the first half of 2016, the industry sold 46.261 million hardcopy peripherals, according to IDC (1, 2). While HP remained the top supplier of printers and MFPs with approximately 36% market share, its sales and share declined in the first half of this year compared to 1H 2015. Samsung, which is a much smaller supplier of hardcopy peripherals, also experienced unit sales and market share declines this year. The acquisition of Samsung will help HP to regain its share and slightly improve sales, but since the market is shrinking, its unit sales will not be as high as they used to be years ago.

HP and Samsung expect to close the transaction within 12 months after all the regulatory reviews and other conditions. In addition, Samsung agreed to invest $100 to $300 million in HP by purchasing the latter’s stock on the open market. The move seems to be rather interesting because Samsung will end up invest in one of its rivals in other markets.

Source: HP

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  • Samus - Friday, September 16, 2016 - link

    What I mean is instead of showing a loss to pay for the (who knows, possibly billions in overall damage from litigation to settlements to brand damage) they can effectively write down the sale of the printer division, netting 0 loss on paper. It's a better alternative that divesting profits from another department.

    Because of it isn't obvious their smartphone division likely won't have a profit this fiscal year. It's already a cutthroat low margin market dependant on economies of scale.
    Reply
  • Zoomer - Tuesday, September 20, 2016 - link

    While they are both one time items, it'll most assuredly be broken out separately. Reply
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  • Aramchek - Friday, September 16, 2016 - link

    It was HP Enterprises that sold off a software division, which is nowadays a different company from the PCs and printers HP that bought Samsungs printer division.

    Personally, I'm going to order a high capacity toner for my Samsung laser printer before it is too late.
    Reply
  • creed3020 - Thursday, September 15, 2016 - link

    That printer pictured is exactly what I have. I don't see how less competition is good for consumers though. Printers and ink should be cheap, but that is not the case. Reply
  • TheinsanegamerN - Friday, September 16, 2016 - link

    Brother printers are your friend. Reply
  • DCide - Thursday, September 15, 2016 - link

    So the two losers join together, and the biggest loser takes charge. No one else is losing, although Brother is slipping a little. HP is falling so fast that, by the time this acquisition closes, they will still be declining the fastest - even with Samsung's business. They can now proudly hold the titles of Biggest Loser and Lone Loser concurrently.

    So while it's true the industry's declining - which is inevitable - It's interesting to note it's really just HP who's declining! HP had better not be in denial of this fact by blaming an industry downturn which is only turning them down!
    Reply
  • DanNeely - Thursday, September 15, 2016 - link

    Of the big 5, only Epson managed to actually increase its sales in the first half of the year. It's a shrinking market, so continued loss is almost inevitable.

    I am however skeptical about how much of the bought market share HP will be able to hold onto. Irrespective of both companies current struggles, just the nameplate going away will probably be enough to drive a significant number of loyal Samsung buyers into examining the entire market again even if HP is offering an updated version of what they're looking to replace.
    Reply
  • Samus - Thursday, September 15, 2016 - link

    Brother products are just such a scam when you consider they are the only company that separates the drum from the toner cartridge, creating a hidden cost and prolonged reduced quality. Every time I'm at a medical office or a store and I get a printout receipt that has lines, shadowed text or toner rubbing of the paper, I look over and it came out of a Brother.

    Epson is similar in that they have famously (since the Stylus Color II) used an external printhead instead of integrating them into the cartridge. This was a disaster in the 90's and cost them some major street cred with everyone from IT to consumer reports, but ironically, Consumer Report now ranks Epson printers (and has for years) as among the most reliable and least expensive to operate. I've used Epson ink printers for years and the cost is incredibly low, even buying genuine ink.

    Canon printers are all over the place. The "HP of Japan" laser printers (most of them PHYSICALLY take HP cartridges, and many of HP's older Color laser printers were made in Japan by Canon) are pretty reliable, if not ridiculously complex and over engineered in true Japanese fashion. But Canon ink printers are complete garbage. Their entry-level and SMB printers (ink and laser) also suffer from the "Xerox" effect in that they have terrible UI, terrible software support, and are just clunky to setup.

    Lexmark is still one of my all-time favorites solely for their support, which is excellent. Continued firmware updates, bullet-proof drivers, native Linux compatibility per model (not just a universal driver) and availability of maintenance kits for most models are icing on the cake. However, they are, undoubtedly, the most expensive printers to run when buying genuine consumables, and they aren't a walk in the park to repair like most HP's.

    Which brings me back to HP. Yes, they have a LOT of duds. You can't buy a <$100 printer and expect it to be of lasting quality. But HP printers are incredibly reliable, easy to fix (basic service like rollers, springs, belts, gears and memory upgrades and even fuser replacements are tool-less on SMB models.) And now with HP Pagewide ink printers having proven reliable, I think Epson might lose its value proposition for lowest cost per page. Those Pagewide printers can do 10,000 pages @ 5% for <$100 a cartridge, are full color and print a page a second.
    Reply
  • buxe2quec - Friday, September 16, 2016 - link

    I don't have much experience, but I know that once I found a HP OfficeJet 1300n (without ethernet module though) on a street and I brought it home. It had the foil around the fuser broken and it was jamming paper. Replaced for 20 euro myself (that includes buying a spare) and it has run perfectly ever since.

    It stopped printing the self report since I updated the memory and it has never been able to print at 1200 dpi on Windows 10, but it still has ink for 3-5k pages :)

    Easy to repair even at home.
    Reply

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