U.S., W. European and World Wide Market and Trends for Laser and Inkjet Supplies John Shane Director, Communication Supp

1. U.S., W. European and World Wide Market and Trends for Laser and Inkjet Supplies John Shane Director, Communication Supplies Consulting ServiceSeptember 2010

2. Industry analyst firm focused on the consumer imaging, office document technology and production printing & publishing industries. UK Boston Tokyo Beijing Focused Credible Responsive Visionary

3. Relationship-Based Consulting Services Hardware Services Software Supplies • Digital Photography • Image Scanning • Photo Printing • Internet Imaging • Digital Photography • Internet Imaging • Image Scanning • CommunicationSupplies • Photo Printing Consumer • Digital PeripheralsSolutions • Image Scanning • China Printers • Network DocumentSolutions • Managed Print Services • Dynamic ContentSoftware • Network DocumentSolutions • CommunicationSupplies Office • On Demand Printing • Wide Format Printing • Jetting Technologies • Production Workflow Solutions • Document Outsourcing • Business Development Strategies • Dynamic ContentSoftware • On Demand Printing • Production WorkflowSolutions • CommunicationSupplies Production

4. U.S. Print Volume (B) • “Print” volume withstood previous recessions • Explosion of devices, analog to digital • Hint of some impact from recessions • Print volume declines in ‘08 and ‘09 • Market is mature • Recession is be deeper • Office market is most vulnerable • Fewer people and less activity • Focus on costs, electronic workflow • Production is more resistant • Analog to digital • Higher value pages (color) • Home may be the most resistant –but for photos?

5. Recession’s current impact on the supplies market • Overall print volumes are down in ‘09, 9% from the peak in 2007 • Reduced headcount and activity • Emerging MPS impact • Great incentive to save money on office supplies • 3rd Party Product gains share but not enough to offset overall decline • 35% share for B/W printer, 23% share for B/W MFPS, 6% share for Color devices • Duplex rates • Restricted color use • Growing interest in Managed Print Services • Print volume reductions come with MPS

6. Recession’s longer term impact on the supplies market • Slower growth than previously forecasted • Slow return of white collar employment • Residual reluctance to increase costs • Slower decline for B/W printing • Slower shift to color, on-going controls • Some aftermarket share gains to stay? • MPS gains share and impacts supplies • Print volume reductions within an organization • Shift to less-paper processes • Increased use of 3rd party • Duplex printing • Shift to higher volume machines with lower CPP? InfoTrends believe that the recession will have a long term impact on print

7. Supplies Market Forecast 2008-2013

8. U.S. & Western Europe Installed Base Forecast Units (000) US Western Europe

9. U.S. & Western Europe Total Print Volume Forecast (B) US Western Europe

10. World Total Print Volume (B)Electrophotography and Desktop Inkjet

11. World Total Print Volume (B)Electrophotography and Desktop Inkjet

12. U.S. & Western Europe Electrophographic Marking Supplies $M at Final POSElectrophotographic Copier and Printer and MFP Total Value=Toner, Developer, photoreceptor and Residual Cartridge US Western Europe

13. U.S. & Western Europe Electrophotographic Marking Supplies $M at Final POS Electrophotographic Copier and Printer and MFP US Western Europe

14. U.S. Serial Inkjet Cartridge Units (M)Serial Inkjet Printers/MFPs US Western Europe

15. U.S. Serial Inkjet Cartridge $M at Final POSSerial Inkjet Printers/MFPs US Western Europe

16. U.S. Facsimile Marking Supplies $M at Final POS US Western Europe

17. U.S. Total Marking Supplies $M at Final POS US Western Europe

18. World Total Marking Supplies Value at Final POS $MElectrophotography and Desktop Inkjet

19. World Total Marking Supplies $M at Final POSElectrophotography and Desktop Inkjet

20. WW Marking Supplies Value at Final Point of Sale $M

21. OEM vs. Aftermarket

22. U.S. Aftermarket Share of Total Marking Supplies $MElectrophotography US WE

23. U.S. Total Aftermarket Supplies Revenue at Final POS $MElectrophotography US WE

24. U.S B/W Laser Cartridge Channels 2009 Share of Units

25. U.S Color Laser Cartridge Channels 2009 Share of Units

26. U.S. Color Aftermarket Issues • Aftermarket penetration about 7% • Higher for separates and for non-Chemically produced toner • Lower for AIOs • Developer • AIOs very difficult . Barriers are: • Toner • Matching toner to drum • Process problems/reliability • Reseller concerns? • Users are ready to try aftermarket color • Resellers may not be ready to offer them

27. Leading laser cartridge manufactures supplying to the US market

28. Q47: Toner Cartridges Typically Purchased for Laser PRINT Devices Which type of toner cartridges does your company typically buy for your laser printers or multi-function devices? N = 306 303 302 303

29. Q53: Whether Toner Cartridges are Refilled For the non-OEM, refilled, remanufactured, compatible toner cartridges that you use. N = 177 110 115 163

30. U.S Inkjet Cartridge Unit Demand (M)

31. Western Europe Inkjet Cartridge Unit Demand (M)

32. U.S. Aftermarket Share of Inkjet Cartridge Units

33. Western Europe Aftermarket Share of Inkjet Cartridge Units

34. U.S. Aftermarket Share of Inkjet Cartridge Units

35. U.S. Inkjet Aftermarket Product Types Integrated Cartridges

36. U.S. Inkjet Aftermarket Product Types Ink tanks

37. Western Europe Aftermarket Share of inkjet Cartridge Units

38. U.S Inkjet Cartridge Channels 2009 Share of Units

39. Q48: Inkjet Cartridges Typically Purchased for Inkjet PRINT Devices Which type of inkjet cartridges does your company typically buy for your inkjet printers or multi-function devices? N = 306 303 302 303

40. Q54: Whether Inkjet Cartridges are Refilled For the non-OEM, refilled, remanufactured, compatible inkjet cartridges that you use. N = 158 71 68 138

41. MPS Impact on Supplies and our evolving need to print

42. Reasons for Office Printing Fading Emerging Rapid Growth Peaking Declining Read and Discard Temporary Reference Printing Growth Transactions Collaboration/Editing ? Archival/Storage Time

43. Document Printing Migration and Losses Short run color Variable data Conventional Print Photo Books On demand Marketing Production Digital Mobility Social Media Promotional Newspapers Forms Magazines Invoices Office Print Statements Reports/Memos E-mail

44. Office Document Printing Lifecycle Fading Emerging Rapid Growth Peaking Declining Contracts/Legal Docs Forms/Invoices Engineering Docs Printing Growth Web Pages Financial Reports Proposals Maps Spreadsheets E-mail/Memos Color Brochures Presentations Marketing Collateral Reports Mobile? Newsletters Social Media? Time

45. U.S. MPS Market Forecast $M

46. U.S. MPS Share of Supplies Market $M at Final point of Sale – Supplies in Office Environment (Excludes Home and Production)

47. Percentage of Money Initially Saved by Assessment U.K. France, Germany N = 184 128 Respondents who are currently engaged in MPS

48. MPS disrupting the supplies market • Less print in the workflow • More duplex printing • Lower cost per page • Migration to more cost effective devices • Cost pressure across all classes of office devices • Increased use of 3rd party supplies • Controls on color • Cost per coverage pricing model? • Disruptions in the distribution channel

49. Distribution Issues • MPS impact on the channels? • Who will lose who will win the business as it shifts under an MPS plan • All suppliers need to position for MPS • What is the role of the contract stationer in MPS? • What is the role of the internet specialist? • Distributors? • How does MPS change supplies buying and delivery?

50. U.S. MPS Impact on Supplies 2010 Level of MS Service Channel Legacy of MPS Provider End User Organization Size