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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  • BrokenCrayons - Thursday, September 15, 2016 - link

    <sarcasm> I'm sure this acquisition will make HP's ink and toner cartridges MUCH cheaper! I'm also very excited about the low ink/toner warnings starting when I have 50% of the consumable's life left instead of 75%! </sarcasm>
  • JoeyJoJo123 - Thursday, September 15, 2016 - link

    This right here.

    HP Printer Ink prices are basically a meme. It's more expensive than human blood, per mL.

    Printer companies might have better success if they charged reasonable prices for ink/toner and used standardized cartridge sizes, universal to all printers. It's functionally cheaper to operate printers by sourcing the cheapest toner cartridges that you can source, then finding the printer with the best features that utilizes that toner cartridge. It really should be a case of different printer manufacturers designing printers and pricing them based on feature set and print/scan quality.
  • Michael Bay - Thursday, September 15, 2016 - link

    >scan quality

    Not with this CIS crap eating the market.
  • mindless1 - Sunday, September 18, 2016 - link

    I know, but that goes against their profit model which is to make money on cartridges. Right now I run primarily Samsung and Brother B&W lasers specifically because both can be DIY refilled with bulk toner for about $8 a refill. Some Samsungs need a fuse replaced to do it and some Brothers a reset gear flipped back to start position, but beyond that you just buy a new cart every (n)th time to get a new drum, once the old one starts flaking off and print quality suffers.

    You can also buy 3rd party drums separately but in my experience it's hit or miss if they have any defects or equal lifespan, plus it's handy to have a 2nd cart available when you do bulk refills, so you have a full one ready to toss in if you're in the middle of a big print job and can't take the time to refill the one in the printer running low, at that moment.
  • DanNeely - Thursday, September 15, 2016 - link

    When Samsung is pulled off the top 5 list, who's going to move up and onto it? More generally is there a top 8/10/etc list available somewhere to break down the Others segment a bit more? Or one that breaks the industry down by market segments? (eg One of HPs reasons for buying Samsung is lack of presence in the copier segment - I didn't even realize discrete copiers were still a thing at all.)
  • Michael Bay - Thursday, September 15, 2016 - link

    When they say copier, they really mean MFU for the workgroup, that big thing in the corner.
  • Samus - Thursday, September 15, 2016 - link

    "That big thing in the corner"

    Haha, classic.
  • SeleniumGlow - Thursday, September 15, 2016 - link

    I still remember the Xerox Machines in my office. Everyone literally used the word "Xerox" to mean "copy". Like - Hey, get a Xerox of the interviewee's resume.
  • Samus - Thursday, September 15, 2016 - link

    Two things come to mind here. One is HP sold their software arm last week to a UK company. Two is this is a really good deal for HP. It eliminates a competitor and gains some valuable engineering and IP. They could have done worse, paying more for a corporate arm that makes absolute crap (Savin/Kyocera/Konica Minolta/Xerox printing divisions all have some substantial issues ranging from quality to support, most of them exist purely based on leasing profits)

    Unfortunately, I never thought much of Samsung printers. The fusers seem to overheat quickly...most of their entry level (sub-$500) printers can't print 50+ pages continuously without slowing down or halting due to a thermal alarm. However, like HP printers, they are surprisingly reliable and they are among the only companies that continues to produce "maintenance kits" for their enterprise printers.

    But the real takeaway is Samsung could certainly use this cash infusion to assist in the financial fallout that will result from the Note 7 recall. Their printer business just really never took off like it could have if they really put effort into it, but like many arms of Samsung corporate, it's just kind of there for diversity and nothing else. Samsung is like an IBM or Xerox in that regard.

    What is clearer than ever, though, is HP has obviously decided to cement their future in imaging, which is a good thing. Just a few years ago that Apotheker douche was trying to spin it off, and hilariously, HP ended up selling the software division instead (the only division he wanted to KEEP.)
  • Death666Angel - Thursday, September 15, 2016 - link

    "Samsung could certainly use this cash infusion to assist in the financial fallout that will result from the Note 7 recall."
    Nope. They most certainly have tens of billions of dollars of cash lying around. They are a mega conglomerate with tons of devisions, most of which are highly profitable.

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