*NEWS*LATEST ON INDIA’S MFP MARKET
*NEWS*LATEST ON INDIA’S MFP MARKET
2006-01-07 at 10:37:00 am #13646
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.
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.
“With growing acceptance and user familiarisation, MFDs have begun to emerge as ‘communication hubs’ for networked offices”
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.