With many hardcopy vendors reporting poor financial results during recent months, it was hardly surprising that the market continued to contract.

According to International Data Corporation (IDC), the overall market declined to 4,52-million units in the second quarter of 2012, a fall of 14,1% compared to the 5,27-million units shipped in the same quarter a year ago, showing quite a noteworthy deterioration as the gloomy economic situation continues to hamper recovery.

Most declines are being seen in the consumer and low-end laser markets, and this led to revenues declining by a lower level of 4,2% to $2,5-billion in 2Q12 from $2,6-billion in 2Q11.

“The economic situation in Europe is having a clear and immediate impact on sales of hardware,” says Arnaud Gagneux, director of IDC’s Western European Imaging Hardware Devices and Document Solutions group. “End-user segments that are traditionally price sensitive, such as consumer and small business, have limited budget allocated to hardware expenses, which is reflected in the latest shipment trends.

“It is not all negative, and there are profitable opportunities, as demonstrated by the growth in A3 colour devices and clear proof of the demand for managed services in both the enterprise and SMB segments. This is driving the transition from boxes to services, which are still a challenge for some vendors and their partners. Now is the time to invest and plan for the service-led next chapter of imaging.”

According to Phil Sargeant, program director, hardcopy markets are certainly suffering at the moment as demand remains weak due to the dire financial, economic, and political situations in many countries. These factors are leading to high unemployment, budget restraints, and ultimately a slowdown in the shipment and installation of hardcopy products.

All of the top five Western European countries showed double-digit declines as many economies could be described as fragile at best. The prolonged eurozone recession and the continuation of the weak euro is impacting revenues and profits for most U.S. and Asia Pacific manufacturers. European subsidiaries are under strong pressure to absorb price increases, but inevitably some are being passed on to their channel partners and customers, with many price rises being seen in hardware and consumable markets over recent quarters.

Most technologies and segments for the quarter show year on year declines, but there was positive growth in the A3 colour MFP market of 8.1% and production devices increased by 14,5%. However, there was disappointment for inkjet manufacturers as consumer markets slumped by 16.6% and business inkjets weakened as the poor economic situation continued to affect the general business environment.

This in turn no doubt is affecting demand in both consumer and business markets and results for the first half of 2012 are not particularly encouraging as the year on year comparison for the half year shows a decline of 12.9% and even at this early stage it seems that full year results for 2012 will be negative unless there are some extraordinary shipments during the latter quarters. However, there is optimism that the market, in value terms, will remain stable as prices are holding and there is scope for growth in segments such as higher speed laser segments and production devices.