2005:CANON U.S.A. INC

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Date: Thursday April 7, 2005 12:30:00 pm
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    Canon U.S.A. Inc.

     

    Canon U.S.A. believe
    2005 will be a time of entrenchment more than transformation. The
    multifunctional products (MFPs) that form the backbone of office communications
    today will not change appreciably, but instead will become even more tightly
    integrated into the IT infrastructure and business workflow. MFP devices are
    ideally suited to address the complex needs of corporations still straddling
    both the paper and digital information cultures. From a practical standpoint,
    companies have made a sizeable investment in their network infrastructure and in
    e-mail as a core communications system. They seek equipment solutions that
    exploit these technical capabilities and deliver greater return on investment
    (ROI).

     

    By
    merging printing, copying, faxing and scanning functions into one seamless,
    desktop-controlled network operation, MFPs are uniquely suited to bring new
    efficiencies and economies to enterprise communications. While widely recognized
    for their network printing capabilities, we believe the feature that will drive
    demand of MFPs in the coming year is the scanner.

     

    All of
    our networked Canon imageRUNNER series devices include built-in scanning that
    integrates with e-mail, fax, document management and other networked enterprise
    applications. With this capability, paper documents and hard-copy images can be

    scanned into the system and converted into electronic file formats (e.g., TIFF,
    JPEG, PDF) for transmission electronically across intranets, Wide Area Networks
    and the Internet. As a result, the MFP can service the document management and
    distribution needs of a geographically dispersed organization, while lessening
    its reliance on hard-copy faxing, overnight mail or courier services —
    dramatically reducing the overall cost of doing business.

     

    One of
    Canon’s top performing product categories in 2004 — color laser copiers and
    printers — will continue to strengthen throughout 2005. Spurring this acceptance
    is faster printing speeds, lower costs and better reproduction quality. With the
    lower price points, color also is affordable for mid-size and smaller companies,
    and has never been easier to implement.

     

    We have
    heard from dealers and customers that over the next 12-plus months, a
    significant number of businesses plan to either replace existing monochrome
    devices or augment their capabilities by adding a dedicated color unit. This
    should not be interpreted as the demise of black-and-white printing. We believe
    high-volume monochrome printers will continue to be the everyday workhorses of
    corporate environments for many years.

     

    The key
    to success in the color market is choice — literally, covering all the bases.
    The introduction of color-enabled MFPs can support a company’s need for
    occasional color, while small businesses and the SOHO market can benefit from all-in-one (AIO) color laser
    and inkjet printers for outputting both photographs and documents.

     

    Another
    market trend worth noting is software. While industry attention traditionally is
    riveted on hardware, flying under the radar is what is happening on the software
    front to improve and drive the new breed of “smart” networked, multifunctional
    devices. As the MFP becomes integrated into the corporate infrastructure, the
    expanded role and responsibilities will require greater control of how devices
    interface, perform and share chores. In anticipation of this looming need, Canon
    is compiling an ever-growing library of upgraded function-specific software to
    support customer workflows in a more direct manner, such as a program to index
    and efficiently process large volumes of scanned documents (i.e. checks or
    invoices) and another to create and print custom forms.

     

    A final
    area is security. In response to corporate governance and regulatory acts, such
    as Sarbanes-Oxley, Gramm-Leach- Bliley and HIPAA, companies are seeking ways to
    better safeguard the confidentiality of information, improve accountability and
    record keeping, and maintain auditable records of pertinent transactions and
    communications across media and touch-points. Yet while networked,
    multifunctional devices are indispensable in managing workflows, there are
    increased security challenges. Canon takes this challenge seriously and has
    created special software and a security kit to protect information that is
    entered into, processed and distributed by the imageRUNNER series. In 2004, the
    solution was evaluated and validated in accordance with the provisions of the
    United States National Information Assurance Partnership (NIAP) and earned the
    highest U.S. Common Criteria ranking — EAL 3 — presented to date for a
    multifunction product.

     

    Keeping
    our dealer channel abreast of the latest digital imaging technologies and
    product innovations is a Canon priority. We have developed a rich, robust
    e-learning environment that enables on-demand product knowledge and
    certification. In response to fantastic participation from dealers nationwide,
    the Canon ISG Sales Training Learning Zone was expanded to include a new
    Learning Management System that increases personalized learning and is
    customized for individual dealerships and resellers.

     

    To
    summarize, Canon believes that the surprisingly strong market in 2004 will in
    all likelihood persist in 2005, fueled by a growing demand for color in the
    office and network-ready, digital imaging devices. The dominance of networked
    multifunctional laser printers in large, mid-sized and small organizations will
    solidify in the coming year as companies leverage the advanced digital copying,
    network printing, e-mail functionality and network scanning features. This will
    stimulate profitable secondary sales avenues for productivity-enhancing,
    performance-boosting software and peripherals, and security products and
    services. With the MFP as the primary communications hub, also look for emerging
    Java-based application solutions that extend network capabilities into the
    wireless frontier.

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