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Today and Tomorrow: Considering Digital Imaging an SGIA Interview
By Dan Marx, V.P of Markets & Technologies, SGIA
SGIA: With this being the 10th anniversary issue of the SGIA Journal, let's take a moment to consider the amount of change that has occurred in the past decade. Describe, if you will, the ways the specialty imaging industry has changed since 1997.
Williams: One of the biggest changes in the wide-format graphics market is the introduction of faster and wider inkjet printers, as well as the introduction of different inkjet ink types such as solvent, eco-solvent and UV-curable. They opened up new markets and applications such as bus wraps (previously done on electrostatic printers), and printing on uncoated vinyl (previously done on expensive coated vinyl) for inkjet printers.
Greene: I started as an analyst in the wide-format market in 1997, so this one really hits home for me. I think the biggest thing has been the incredible technology development, especially in the inkjet market, over that time. The range of applications that have been enabled by these developments is just incredible. It is also more competitive now than it has ever been. Consider that in 1997, the digital graphics printing market was led by e-stat, and there were just a handful of hardware suppliers. Now, with the combination of aqueous, solvent and UV-curable inkjet, we can identify more than 50 hardware manufacturers. Specialty imaging is also much more of a global business now than it was 10 years ago, which of course presents both challenges and opportunities.
SGIA: One of the unique things about our industry is its diversity. Specialty imaging is used to produce everything from signs to garments and surfboards to circuit boards. Do you think our industry will become even more diverse in years to come, and how will technology promote or hinder this diversity?
Flippin: Over the past decade, imaging technology has made great moves forward - and so has SGIA. With roots in screen printing, specialty imaging (and SGIA) now also includes inkjet printing, electrophotography, embroidery, pad printing and various methods of sublimation. I might suggest that specialty imaging is already integrated into many industries - not just one - as an industry is defined as a "distinct group of productive or profit-making enterprises," or as a "branch of a craft, art, business, or manufacture." Technology will absolutely push the diversity of specialty graphics. New platforms, advancements in chemistries and larger R&D budgets will help grow what may be perceived today as niche markets into mainstream ones.
Williams: Screen printing is the analog-print technology that is used to print on substrates other than paper (such as vinyl and textiles), and products that are not flat (such as mugs), as well as products such as printed circuit boards. Inkjet is the digital printing equivalent of screen printing, and as such will find its way into all screen printing markets - as well as the markets served by other analog-print technologies. Inkjet printing is already used for printing on wall coverings, which are today printed by both screen and gravure printing. It is beginning to be used in high-speed document printing, competing with offset as well as electrophotography. In the future, we can expect to see inkjet printing used in packaging applications. In short, inkjet printing is a flexible printing technology that will find a home in many applications.
Greene: I think the industry will become more diverse in terms of the technologies and applications, with developing technologies certainly enabling that diversity. My opinion is partially based on faith in the equipment end users who routinely develop creative ways to use technologies, and partially on some of the exciting new technologies that I have seen that are targeted at a wide variety of applications. These developing technologies range from new print head technologies - that may revolutionize the way some mainstream products, such as flat panel displays are manufactured - to new ink and coating formulations, which vastly improve the economics of digital print even while image quality and adhesion are improved.
SGIA: What do you think is the primary challenge facing graphics producers, whether they are digital printers, screen printers or both? What forces are creating these challenges?
Williams: The primary challenges facing graphics producers are: First, reacting to the highly competitive nature of existing markets; and second, finding and selling to customers in new applications.
Greene: I believe the biggest challenge graphics producers face is commoditization, because when you are selling a commodity, price is everything. The forces creating this challenge are numerous, but they include the relative attractiveness of the wide-format graphics market from a marginal standpoint and the low entry barriers. These could create a wide-format graphics overcapacity. Additionally, print service providers in low-cost markets, such as Asia and Latin America, can provide additional production capacity, which is further driving down the average cost per square foot of printed material. This is why it is so important for print service providers to continuously stress their service levels and identify value-added opportunities for their customers.
Flippin: It depends. We need to specify about whom we are talking. A small graphics screen printer has a set of challenges drastically different from a large screen printer. And both of those screen printers face different challenges from a digital (wide-format inkjet) print shop. Patti, Tim and I all provide market trends and analysis. Our analysis is often based on the sum of many tens of thousands of shops. The biggest challenge, therefore, might be identifying a shop's individual needs and creating a business plan that suits future changes in the market - how to diversify product offering, when to invest in new technology, who to target as new customers, etc.
SGIA: Based on your market research, which digital imaging markets have become saturated or are nearing saturation, and which of these existing or emerging markets offer strong growth opportunities in the next five years?
Flippin: This is a difficult question to answer quickly as it depends on which perspective I use. There are imaging technologies today that are experiencing larger sales volumes (from the supplier perspective), but generating lower sales revenue at the user level. The converse is true as well.
Generally speaking, we see less emphasis on aqueous inkjet printing of graphics as well as of cut vinyl and graphics screen printing. We feel that solvent inkjet printing will hit a plateau (in revenue terms) by 2009 here in the United States. But some solvent applications will continue to grow for quite a while. The greatest technology opportunity is in UV-curable inkjet, but this does not mean that every shop needs to run out and buy one yesterday. I would hope that the entire market (users, suppliers and analysts alike) would prefer to see a healthy installed base of printers operating with healthy margins as opposed to a market oversaturated with capacity, having to slice prices in order to generate work.
Williams: The signage market, if not saturated, is certainly a highly competitive market. Wide-format PFP shops focusing on this segment are finding new ways to differentiate themselves and serve their customers. One example is the shift towards soft (textile-based) signage instead of paper or vinyl. New UV-curable inkjet printers, both flatbed and roll-to-roll, also provide PFP shops new product types to sell to customers.
Greene: I am most bullish on opportunities for growth in the UV-curable inkjet market. Our research suggests that we are looking at better than 25 percent annual growth rates in that market, assuming we continue to see the types of product improvements that have gotten us this far. There remains quite a strong market for eco/mild/light solvent inkjet printers. The image quality improvements that the new generation of print heads, ink formulations and media products provide make them more comparable with water-based inkjet.
SGIA: To what extent will high-production inkjet printers - let's use the Inca Onset as an example - cut into markets previously not accessed by inkjet? Where will these cuts take place: In screen printing, offset, flexo or all three?
Williams: In all three, plus gravure.
Flippin: It's easy to speculate, but I'd like to wait and see for myself. I find it interesting to learn how users leverage new technology. In the past, we often saw new technology used in ways quite off-beam from how the machine was designed. With print speeds in excess of 464.5 square meters (5,000 square feet) per hour, I can only imagine how a press could be used to both supplement and complement several analog printing methods.
Greene: I see production inkjet cutting into a wide variety of markets that have not been accessed by inkjet, and impacting all three of those technologies. There is a tremendous amount of interest and energy going into markets such as production textile printing and integration in packaging systems. I don't think these developments are far off at all. Right now is one of the most exciting times to be working in the inkjet business because there are so many directions that suppliers are taking the technology, which are beyond providing prints, but really moving inkjet systems into industrial settings. Just one example is the optical-disk printing market. There are at least two major ink manufacturers, Sun Chemical and Sericol, which have developed or co-developed optical-disk printing systems, using UV-curable inkjet technology that is part of an on-demand, optical-disk production environment. This business has been dominated by offset and screen in the past. Now, because of the market need for short runs and variable data, inkjet is making inroads in the optical-disk printing market.
SGIA: Let's look 10 years into the future. How will our industry and its technology differ from the way it is today?
Flippin: I hope that we will see a governing body able to regulate the specialty graphics market - especially for inkjet printing. As society recognizes the need for more environmentally friendly products and sustainable systems, we need definitions. How do we define a biodegradable product? What does a shop need to do to be classified as "green?" I also hope we see fewer petroleum-based products and more products derived from renewable resources.
As for other issues, I think that we will see consolidation of users and suppliers over the next decade. The demographics of the companies serving these markets will shift and the profiles of the imaging technologies utilized will be vastly different from that of today's market. This includes more use of UV-curable inkjet systems - both in roll-to-roll and flatbed varieties - as well single-pass using new inkjet chemistries. But how much and how quickly: Only time will tell.
Williams: Today, I think that many still consider digital printing as not a "real" printing technology but rather an "office" printing technology. In the future, digital printing will take its place as a major printing technology, with the capability to "compete" with analog print technologies. Compete may not be the correct word because, while some of the output from digital printing will be replacement, much will be incremental (i.e., it did not exist before). Examples from the wide-format graphics market include the ability to print short runs, print large applications such as building wraps and create customized or personalized products such as birthday banners.
Greene: Ten years is a long time to look ahead, because there are so many things to consider: Technologies that are now under development, those just getting started and others that today look like they can't significantly improve much more. Considering how fast things have changed in the last ten years - when wide-format graphics were primarily the domain of water-based inkjet, thermal transfer and e-stat - it is hard to even fathom where we could be in 10 years. Today's most advanced printers would look like fossils if the rate of development continues. Nevertheless, as far as each of the points you have identified: I think the market is developing in such a way that years from now, printing companies will come right out and ask their customers as part of the transaction, "Do you want our expected level of quality, or someone else's?" They will have the systems in place to order printed graphics from low-cost markets such as China and get them delivered in push-button fashion.
I am a big believer in single-pass inkjet. I firmly believe that 10 years from now we will be remembering wistfully the days when inkjet print heads shuttled back-and-forth across wide surfaces.
I also believe solvent absolutely has its place in the market now and into the future. That said, I am also positive on UV-curable inkjet. The two technologies will be deployed and in use in the markets and applications where they are the best fit. I would not say that either is going away in a 10-year time frame. What is more likely to happen is there will be some other technology, such as RFID-activated inks, low power-consumption and lightweight electronic displays, or something else that could change the specialty imaging industry.
Michael Flipplin from Web Consulting, Tim Greene from InfoTrends and Patti Williams from I.T. Strategies
This article appeared in the SGIA Journal, 4th Quarter 2007 Issue and is reprinted with permission. Copyright 2007 Specialty Graphic Imaging Association (www.sgia.org). All Rights Reserved.
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