HP’s manufacturing operations will be adversly affected this quarter due to the COVID-19 (coronavirus) epidemic, according to HP CEO Enrique Lores. "After Chinese New Year, production has slowed down," he said. Meanwhile, industry researcher IDC has warned that concerns over the epidemic may acutely impact the global large format printer market.
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| HP factory in China |
In its latest global quarterly (4Q19) Large Format Printer Tracker*, IDC said that while shipments were up between 10%-14% in Europe, Middle East, and Africa (EMEA), Canada and Latin America, shipments in the Asia/Pacific region (excluding Japan) grew only modestly by about 1.5%, while shipments in Japan declined sharply by about 16%.
“This is an area that IDC is watching closely due to concerns not just about the regional market, but also because many of the large format printers sold by global manufacturers are manufactured in the region and coronavirus concerns may acutely impact the large format printer market,” says IDC.
Wide format market leader HP Inc.’s bottom line will take a hit this quarter due to the coronavirus epidemic, CEO Enrique Lores told CNBC. “We produce most of our products in China. After Chinese New Year, production has slowed down. We are seeing a recovery, and the way we’re looking today is a temporary impact during Q2. We have estimated that in Q2 this will have an 8 cents impact on EPS, and this is what we have built in our predictions."
Lores said the majority of HP’s factories in China are open but production is running at less than maximum capacity.
Printer manufacturer Konica Minolta has recommended that its employees in Japan should work from home and commute during off-peak hours in response to the spread of the coronavirus. The company has also cancelled business meetings and seminars. Konica Minolta last month resumed production at its factories in China after closing them down following a Chinese government-ordered suspension.
Growing concern over the coronavirus has led to the cancellation of several trade shows in China and forced drupa organisers Messe Düsseldorf to issue a statement confirming that the iconic global print expo is scheduled to go on as planned in June: “There is currently no reason to postpone or cancel upcoming trade fairs. For the next events, there is an unchanged high level of approval from exhibitors and visitors.”
The world’s largest producer of printing inks and pigments, Sun Chemical, says it's monitoring its supply chain, including raw materials from China, amid the coronavirus outbreak.
“Proactively managing our customer orders, inventory levels, in-transit shipments and open order levels is a critical path for us,” said Jeffrey Shaw, chief supply chain officer, Sun Chemical. "At this time, our focus also includes materials from China and other high-risk regions that supply to us. Bottom line, we are committed to working through this process with our customers to make sure supply disruptions are minimized.”
As Europe struggles to contain the epidemic, coronavirus cases in Germany almost doubled in a day as supermarkets reported bulk buying by nervous customers. Across the border, Switzerland banned all large events of more than 1,000 people, forcing the cancellation of the Geneva International Motor Show, one of the world’s largest automotive events – a move that will cost the city between €200m and €250m.
The total of coronavirus cases is now almost 90,000 in at least 60 countries, with 3,000 deaths. More than 7,000 confirmed cases are outside mainland China, where the outbreak began. Australia, which has 33 cases (3 March 2020), has recorded its first death from the virus - an elderly male passenger from the Diamond Princess cruise ship.
Latest World Health Organisation updates on the coronavirus can be found here.
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* Elsewhere In the IDC wide format market update, Tim Greene, research director, Hardcopy Solutions at IDC, noted: "Around the world we continue to see solid growth in technologies such as UV-curable and dye-sublimation inkjet printers. Many of the new solutions coming to market are based on these technologies with additional vendors jumping into these technology segments."
The IDC said: The most common large format printers shipped are aqueous inkjet printers, so the leaders in the aqueous inkjet printer market – HP, Canon and Epson – tend to dominate overall market share in the large format segment.
HP Inc. is the overall large format printer market leader with 31% of all large format shipments worldwide.
Canon's share of all large format printer shipments in Q4 was 22%. Its share of shipment value grew to 13% based on the strong performance of the more production-oriented parts of the Canon portfolio.
Epson maintained its strong third position with over 17% of total large format printer shipments worldwide.
