If last year was a year where prices were slashed to meet sales targets and stimulate growth, this year is the year of chasing market share - and prices will likely come under pressure again.
Managed print services (MPS) and contractual sales models are raising the stakes by tying in businesses to long-term contracts (see the tech feature for trends behind managed print services).
Kyocera Mita's managing director, David Finn, says the biggest factor driving sales this year will be "deals, deals and more deals".
"We saw this throughout 2009, and as the economy slowly recovers we will continue to see vendors pushing deals and promotions in efforts to capture market share and grow their channel business," says Finn.
"Ideally 2010 will be an improvement on unit sales versus calendar year 2009. However, as most vendors are pushing their products with the latest ‘hottest offer', the overall generated industry revenue will take a bit longer to recover than unit sales," he says.
Finn also sees managed print services becoming a driving force this year. "Most vendors who have experimented with their offerings in the past will make a renewed attempt to bring on board dedicated resellers and concrete their MPS offering within 2010."
Kyocera's Multi Function Devices (MFD) have been designed to integrate embedded third-party software into their touch-screen control panels. Common packages include Equitrac, a print management and cost recovery program, and KYOcapture, Kyocera's document capture workflow solution, which itself is a rebadged package of AutoStore.
But the vendor is focusing its R&D on meeting "the growing demand of end-users who require faster speeds, higher image quality and lower running costs," says Finn. Printer manufacturers focus on hardware R&D because it is generally seen as the best way to increase sales. However, that could be changing.
"Vendors tend to forecast market situations, address key segments, and spend their R&D in this manner to target growth," says Finn. "Today with tighter hardware margins, resellers are looking for other revenue streams such as software ‘value-add' solutions. As we have seen in the past with some resellers tying in customers with consumable sales, these resellers are also attempting to increase their cash flow with software sales."
With Stead Denton's, The IPL Group selling its stake in Oki Australia to the parent company, the vendor's focus has changed to growing market share.
"We are going to be aggressive" on pricing and we want to provide a good program to our partners, says Takaaki Hagiwara, the newly minted head of the Australian operation. He promises "better rebates than competitors" with the specific goal of increasing the number of Oki sales by a dealer".
"IPL was profit motivated - we want to get more market share and then generate more profit through consumables and managed print services," says Hagiwara. IPL gave Oki a reasonably strong presence in Australia - on par with its market share in other countries, which are all run by full Oki subsidiaries, according to Denton. The vendor claims it is well represented in retail, healthcare, hospitality, travel, financial and government.
Oki is looking to capitalise on a large customer base in the shrinking dot matrix market by pushing harder into colour and MFDs, says Hagiwara. In the transition from dot matrix to colour Oki will be moving into a far more competitive market, Hagiwara acknowledges, but says the company has made the necessary investments.
The vendor has just launched the C110, C130 and C160 to spearhead its assault on MFD, while the MC860MFP is Oki's best seller, in Australia and globally. Hagiwara says the range will expand further with low-end dot matrix and more MFDs targeting the SMB market.
Despite the shrinkage in dot matrix, there are still large customers such as the Department of Transport, which bought 750 dot matrix machines in December.
Brother has taken Australia's highest-selling printer and turned it into an MFD exclusive to the channel. The mono-laser, colour-scanner DCP-7040, which retails for $299, launched on 1 February. It comes with BRAdmin Pro 3, the latest version of Brother's fleet management tool, which simplifies configuration and management. The vendor is expecting 20 percent year-on-year growth in the colour laser market, says Heidi Webster, Brother's marketing manager.
HP is pushing its printers with a story around intelligent print infrastructure for business. It intends to position itself as the managed print services specialist for all customers. The general view is that managed print is the best kind of arrangement, even down to small business, says Richard Bailey , HP's vice president of the imaging and printing group (IPG) South Pacific.
"Customers are still looking for cost-out, more efficiency, more innovation," says Bailey. Environmentally friendly practices and technologies are also strong selling points.
Bailey sees a specific driver for MFD sales around the move to more bundled services, where customers are searching for cost savings. He expects resellers to use HP's WebjetAdmin fleet management tool to better manage inventory, distribution of machines and correct matching of models to needs.
Tactics such as "pull printing", where a machine only prints a job once the user authenticates at the collection point, enforced duplexing and controlled colour use are all methods to reduce print costs.
While the global financial crunch may be officially behind us, credit markets have not yet returned to full health. HP is likely to be a strong competitor because it has a well developed financial services arm that can underwrite leasing deals or pay-per-click agreements.
Four years ago Bailey worked for GE running the equipment finance business. He then moved to HP to head HP Financial Services in the Asia Pacific for four years, supplying lines of credit to customers and repositioning the business for aggressive growth in India and China.
He sees his finance experience as directly aligned to the broader move into managed print services. "Whether it's pay per click or something else, there has to be a financial service beneath that. HP can provide all that," says Bailey.
In February HP local office is hosting a team from its US office to help roll out its QuickPage program. The contractual print service will be a plug-and-play model for partners wanting to sign up customers to per-page or per-click arrangements or level payment, which is a monthly bill based on estimates of usage.
The program will not be operational in Australia until May or June, says Bailey. It will cover deployment of devices, fleet management and workflow consulting.
"We have spent all of last year working with our partners to encourage them to have more specialisation in print to have this kind of work."
Turn to the next page for the hardware advantage
The hardware advantage
As printers become increasingly competitive on the price of hardware, vendors are looking at differentiating themselves through total cost of ownership, green technology and other selling angles.
Fuji Xerox is releasing its EA Ecotoner, which requires 20 percent less heat to diffuse toner onto the paper than regular toners. This reduces the power consumed by the machine during warm-up and print runs.
Its other green pitch is solid ink, which the vendor says it will spend more time promoting. Solid ink printers are refilled by slotting in another block of ink - with no surrounding toners, drums or plastic cases. The ink is made from a soy extract through environmentally friendly chemicals and processes, claims Brad Monsborough, marketing manager for Australia and
New Zealand.
Oki has championed its LED technology for 20 years against laser in the colour market. Brother has just released LED printers too under licence from OKI as a more affordable alternative to laser.
"The quality output is exactly the same to the naked eye," says Brother's Webster. Brother is pricing its LED MFDs at $699 to $899 with print speeds of 16 pages per minute - double the speed of the nearest competing laser, claims Webster.
"LED allows us to make a more affordable machine for the channel with faster speeds, more compact, less moving parts, less maintenance, longer life, and running costs are very competitive," says Webster. The LEDs produce colour at 21c a page, which Webster says is roughly the same as laser.
However, Graham Harman, general manager of OKI Data Australia, claims LED technology is in fact better than laser in several areas.
"Arguably, LED technology will bring out far superior colour and mono than laser," says Harman. LED printers can print onto a far wider range of media - from posters and banners to business cards.
Oki is standing behind the reliability of its LED range with the announcement on 1 December of a lifetime warranty for all print heads.
The Japanese engineering company, which manufactures high-end telecommunications equipment as well as printers, draws on its heritage to customise hardware and firmware for larger customers. Around 10 percent of sales in Australia and globally are customised machines, Harushige Sugimoto, president and CEO of Oki Data Corporation, revealed on a recent trip to Sydney.
Harman gives the example of a merchandising company which wanted a printer which wouldn't automatically fuse the toner after it had been laid onto the paper. Oki engineers switched off the fuser in the printer so the customer could take the paper and apply the image to golfballs, cups and pens.
"You can have your name put onto any surface, then spray it with a chemical fuser to seal it," says Harman. Oki is working with that company because we see huge potential worldwide, even though the development is just in Australia, adds Harman.
HP is going back to the future with inkjets for business. HP claims ink has 50 percent lower cost per page and energy use than competitive laser printers for a similar cost of hardware. It points to the Officejet Pro 8500 all-in-one, its flagship inkjet that it launched last year, as a strong contender.
Inkjet suffers from the perception that it is a Trojan horse for printer vendors chasing the more profitable consumables market - the razor-blade model. Consumer inkjet printers have been sold through Australia Post outlets for $80 a unit or less, with replacement toners often more than the original selling price.
HP's Bailey says it's PhotoSmart consumer range is "a different model" to the OfficeJet Pro range, which promises productivity for SMB and enterprise. "Obviously we are trying to cross over because we think we have a legitimate value proposition for ink in business," he says.
The vendor has had success in the retail sector with low-end inkjets, which have a lower cost of printing and smaller footprints than lasers.
Another angle of attack is energy efficiency, or green solutions. HP has released LaserJet laser printers which have low start-up times (the LaserJet 3010 series) or timers to switch off printers (the CP5220 series). Users can reduce energy use by as much as 50 percent with the LaserJet 3010 series, HP claims.
Australian owned and managed Imagetec has an exclusive distribution deal with Konica Minolta to sell its products here under the Develop brand. The company, also a premier HP partner, targets the 20-150 seat market with machines for desktop to print room, with preferred speeds over 40 pages per minute. It is looking for resellers in regional areas to complement its city-based direct sales force.
Imagetec's printers are modular; customers buy a base unit and add options such as holepunching, security, biometric identification, standard finisher, booklet maker and banner finishing. The modular approach lets customers future-proof their purchases against obsolescence and reduces costs for the manufacturer, claims the vendor.
Security is "becoming more and more concerning for people in the general market", says Imagetec's Glen Morrison, national manager, production print solutions. Companies have a duty of care for information they gather. "People are starting to think of how much the data is worth and what will happen
if it escapes," he says.
One plug-in is a biometric adapter which scans the veins in the finger rather than the fingerprint. The scanner acts as a proximity card to automatically identify the user and his or her permissions, security levels and save/email preferences. Once authenticated the machine will give users the option to scan to their personal folders or directly email their own contacts.
A $363 Bluetooth module lets users print directly from their mobile phone. "It's been interesting already. We didn't know how much we would use this," says Morrison. An employee can print confidential documents from their mobile without having to send
it through the company network.
Another security measure is watermarking. A document printed with a watermark will be rejected by a Develop machine - the job is automatically deleted from its memory and the user will not be able to scan, fax, email or copy the document. A password can be encoded into the watermark to give certain people access.
However, the watermark feature only works on Develop devices, and so would be less useful to
a company with a mixed-vendor fleet.
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