LATEST ON INDIA’S MFP MARKET

[Anonymous]

Need for speed puts laser MFDs on top(India)
Trends such as variable information printing and print-on-demand are leading to greater usage of laser-printing, even in colour.
According
to IDC, the laser MFD market will have a CAGR of around 40 percent
during 2004-2006. In terms of value, laser MFDs cornered a bigger share
of the pie with the ratio of laser to inkjet being 60:40 of a nearly Rs
600 crore market in 2005.
Indian enterprises are demanding
high-speed printing coupled with excellent output quality. This has led
to the deployment of high-end MFDs that print at 35 to 105 pages per
minute (PPM). Costs range from Rs 55,000 to Rs 25,00,000 and these
machines are equipped with functions like document storage,
integration, and password protection.
Initially the MFD market grew
at 25 to 30 percent quarter-on-quarter (QoQ), to stabilise at 8 to 11
percent QoQ. That’s still a CAGR of over 40 percent making it the
strongest segment in the laser printer category.
Samsung India
The
world over, flatbed MFDs are more popular, although they are priced
higher than their sheetfed counterparts. “I feel that the value
proposition of flatbeds will drive the market in 2006. In 2005,
competitively priced sheetfeds grew by almost 400 percent in Q2 &
Q3 (compared to similar quarters in 2004). However, growth rates for
this category dropped in Q4. We believe that flatbeds will be the
growth engine in 2006,” comments Vikram Singh Negi, Country Product
Manager, Multifunction Printers, Samsung India.
Meanwhile, the
3-in-1 space (sans fax) has emerged as a distinct category and is being
preferred by consumers shifting from standalone devices. 3-in-1
machines are available at a 20 to 30 percent premium vis-a-vis
standalones making them a viable option.
The copier-based MFD
category has stagnated. “With the new generation of higher speed
printer-based MFDs coming out in 2006, there will be significant
cannibalisation of entry-level A3 copier-based MFDs by high-speed
(40PPM+), heavy duty printer-based A4 MFDs,” believes Negi.
The
average selling price is declining at about 10 to 13 percent QoQ but
that’s being compensated for by rising toner sales, on account of more
machines being deployed.
Laser MFDs are popular in banking and
government, hospitality and with professionals (SOHOs) such as lawyers,
CAs, CSs and doctors.
Vendors are positioning high and mid-end laser MFDs as part of a document management solution.
Vendor strategies
“With growing acceptance and user familiarisation, MFDs have begun to emerge as ‘communication hubs’ for networked offices”
Xerox India
Xerox
is establishing a footprint across India by offering a compelling
channel value proposition to Indian resellers. “We are promoting colour
in the digital office, digital production and value-added services and
driving the adoption of MFDs in the enterprise,” says Natesh Mani,
Executive Director, New Office Group, Xerox India. The company is
strengthening its two-tier distribution model by shifting sales
activities from a direct model to an indirect one.
Negi says, “We
are concentrating on the SOHO and SMB segments.” To this end, SIEL
strengthened its distribution channel in 2005 and consolidated its hold
of the office automation and fax channel. Its product strategy is to
concentrate on printer-based MFDs, have a wide product portfolio at the
entry level and one or two models at the high-end.
Epson India is
looking for distribution partners who are willing to provide solutions
to customers. “We will be looking at a segmented approach backed by a
fairly high decibel marketing and advertising campaign. We will
leverage our strength in the dot matrix segment,” explains Prabagaran,
Business Manager, Laser Printers at Epson India.
Canon feels that
the adoption of colour lasers in large enterprise has been impressive.
“We are coming up with scalable, software-based solutions to cater to
demands of high quality and secure printing for the enterprise. Our
corporate colour portfolio is tripling every month in comparison to the
same numbers last year and we are looking to be number one in the laser
space,” says Som Gangopadhyay, Marketing Head, Office Systems and
Solutions, Canon India.
The communication hub
Colour laser
printers are being used for printing business documents with graphs and
other colour graphics across industry sectors. Colour printing is now
affordable and the ratio for colour and B&W printing is 1:4 as
opposed to 1:20 some years ago. The concept of print-on-demand (PoD)
that allows commercial printers and other print providers to quickly
turn around short, economical print runs of a precise number of
documents is catching on. The digital printing industry is a consumer
of this technology. Other applications are menu cards, marriage
invitations, business cards and so on and laser printers are
increasingly used to support these PoD applications.
Office Systems and Solutions Canon India
Laser
printers have emerged as solutions that both vendors and partners can
position as a must-have for corporate buyers. It is emerging as the
most sought after mainstream printing device. The market continues to
be stimulated by falling prices and improved technology. It seems
inevitable that B&W laser and colour laser printers will soon
become as commonplace and indispensable as the photocopier.
The
convergence of the copier and printer industries is gathering pace. The
advent of multifunction devices (also known as All-In-Ones) can
potentially replace standalone peripherals such as scanners, copiers,
fax machines and printers, making MFDs the category to watch out for in
office automation and digital imaging solutions. “With growing
acceptance and user familiarisation, MFDs have begun to emerge as
‘communication hubs’ for networked offices,” says Mani.
“The market
is currently witnessing a trend towards multifunction networked units.
Electronic document storage and distribution is picking up. Most
enterprises, both small and large, spend a colossal amount of time in
collating and disseminating information. What they now want is a
solution that saves space, cost and is easy to operate taking care of
their documentation needs,” says Anil Sodhani, National Marketing
Manager, Sharp Business Systems.
Variable information printing is
another application that’s picking up. It permits customised
promotional material to be printed. By customising promos, companies
stand to possibly double or triple response rates of direct marketing
campaigns. In order to deliver the appropriate information to the
target audience, database analysis and management are employed in
variable printing. It lets printer manufacturers position themselves as
information service providers. Variable printing is a powerful tool for
marketing and communication. “We have something called the
Multi-Embedded Application Platform (MEAP), which is an open Java-based
architecture. It can seamlessly integrate with any ERP platform or
operating system in the customer’s workgroup environment,” says
Gangopadhyay.
Sectors driving the growth of laser technology are
BFSI, ITeS, software, education, telecom, government, construction and
utilities.
A slow transition
However, the transition from inkjet
to laser isn’t happening as fast as it should. “There are several
bottlenecks. Changing over from inkjets to lasers is not a smooth
process. The perceived high price of the laser printer, which over a
period has become affordable, has to a great extent hampered the spread
of this technology. The logistics of buy-back of inkjets for lasers
have also not been streamlined so far,” feels Mani.
“Perceived
initial investment is a major bottleneck for driving the laser printer
segment. The perception is that running cost is high. Refilling is a
problem as quality suffers on account of sub-standard toner,” adds
Prabagaran.
Adoption of lasers is low in the largest segment in
India – home. “This is due to non-availability of affordable colour
MFDs,” says Negi. Inkjet AIOs rule in this segment and the share of
laser mono MFDs is less than 3 percent.
In SOHO and SMB segments,
growth has slowed down due to user inertia. They do not like to change
as they are comfortable with standalone devices. “Users still consider
MFDs as complex devices and have a fear that consolidating all
functions in a single machine might result in a collapse if the machine
breaks down,” explains Negi. This fear is the outcome of user
experience in inkjet AIOs which break down regularly due to more
mechanical parts in their design and the use of low-cost material (for
price competitiveness). In laser MFDs the breakdown is comparable to
that of standalone devices. However, the change in perception has not
sunk in and is inhibiting early adoption.
The challenge for any CIO
today is to keep an updated infrastructure as technologies become
obsolete overnight. Scalability, upgradeability and
future-manageability form a crucial aspect of enterprise IT. The
emergence of workgroup printing solutions in the networked environment
for the enterprise is contributing to the popularity of laser-printing
technology.
“Colour will drive the business form next year. The
colour laser market is likely to explode from the middle of 2006. The
availability of an A4 laser MFD at a price below Rs one lakh is one of
the factors that could lead to this,” declares Gangopadhyay.

[Author]

January 7, 2006 at 10:38 AM