HP Shared “Pockets of Growth” in Billion-Dollar Printing Market

HP Shared “Pockets of Growth” in Billion-Dollar Printing Market

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Oct. 1 2015, Updated 3:06 p.m. ET

HP targets “pockets of growth” in printing

Previously in this series, we talked about how recent sluggishness in the PC market has spilled over into the printing market. The strengthening of US dollar (UUP) against other major currencies has played an important role in contributing to the weakness of the PC market.

The latest report by IDC states that the current situation in the PC market is likely to continue through 2016, with 2017 as the year when the market will finally witness growth. The Hewlett-Packard Company’s (HPQ) management also shares the same view about the current trend in PCs, stating that the situation is “likely to remain tough for the next several quarters with continued competitive pricing in printing and soft demand in PCs.”

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As Hewlett-Packard’s (commonly known as HP) company release on September 15, 2015, reported (see the graph below), the company aims to offset recent declines in printer and supply sales by focusing on “pockets of growth” in the printing market, which is estimated at about $230 billion. These pockets include graphics investments, ink in the office, commercial mobility, and 3D printing and expansion into the A3 copier market.

HP eyes 3D printing market

HP claims that according to IDC, it led the printing market with ~43.2% market share in 2Q15. The company’s management views 3D printing as a natural progression from its 2D printer business. HP’s first MJF (Multi Jet Fusion) 3D printing service is expected to enter the market in 2016. HP’s MJF uses Intel Corporation’s (INTC) Core i7 family of processors. 3D Systems Corporation (DDD) and Stratasys (SSYS) are other players in the 3D printing space.

If you’re optimistic about HP, you might consider investing in the Technology Select Sector SPDR (XLK), which invests about 1.25% of its holdings in the company.

In the next part of this series, we’ll look at how HP’s Enterprise Group performed in 3Q15.

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