Growing in focus

Growing in focus

Printer vendors have a lot to thank the digital camera market for. The mushrooming demand for digital cameras and the growing popularity of multifunction printers have breathed new life into the inkjet market.

However, it is not all sweetness and roses for the channel because while overall printer sales have shown a spurt in growth in 2004, the market is changing direction and resellers have to be on the ball to keep up and take advantage.

Multifunction printers (MFPs) have been the talk of the town for the past six months and now account for half of the total printer market. Despite that, single function printer sales remain strong particularly at the bottom and the enthusiast/semi professional ends of the market.

There are new markets developing and new technologies such as wireless printing, double-sided photo paper and pigment rather than dye-based inks hitting the market, but industry research shows there is still a disturbing lack of consumer education in some segments - something both vendors and resellers must work to address if they are get the best out of a sometimes mercurial industry.

As new technologies deliver better print quality and higher print speeds new opportunities are opening in the small to medium business market. While the SOHO and SMB sectors have always shown interest in both inkjet and laser MFPs as space saving productivity devices, inkjets have not been particularly popular as standalone business printers.

However, companies such as Canon, HP and Lexmark are finding there is plenty of potential for specialist inkjet printers to take a stand against lasers in the workplace. While the initial cost is similar to an entry-level colour laser the TCO leans heavily in favour of the inkjet, which can produce printed pages for as little as a third of the cost of a laser but with similar print quality and speed.

However, there is still a perception in business that inkjets are associated with home users and the likes of Canon are working hard to overcome that. "Until recently, inkjet printers were largely designed for home users and specific SMB verticals with high image quality printing requirements, such as graphic design and photography," SME product manager for Canon consumer imaging products group, Sylvia Mills-Vasas, said.

"We identified a gap in the market for lower cost alternatives to laser printing. A lot of SMBs want to reduce running costs as well as the up front cost of ownership. As colour was becoming more important in the business environment, some customers were considering buying a colour laser but had previously been put off by the price point.

"We have come up with a product in terms of TCO which really is a viable alternative to the colour laser because you are looking at a cost per colour page (5 per cent coverage) of about 10c which is about a third of the price of a colour laser.

"Business users are looking for speed and quality. Obviously, colour lasers have very sharp printing compared to home inkjets, which sometimes leave you with a bit of bleeding between colours and blacks. But with our business inkjets we have optimum image identification technology, which can recognise whether you are printing text, graphics, images or a combination and selects the optimum printing for that particular document. As a result you don't get the bleed problem, you get the laser sharp quality and up to 20 pages a minute for mono and 18 pages per minute for colour." Mills-Vasas said Canon was focusing on traditional IT and value added resellers for the business inkjets.

"The products provide an opportunity for the reseller to make an on going service commitment with a customer," she said. "Our standard warranty on business inkjets covers 12 months, back-to-base, with the option of extending it to three years or upgrading it to onsite. Given that level of warranty the channel has a lot of opportunity to offer customers that extra level of service."

"Canon is investing a lot of resources into the business inkjet and SMB product range, with sales and marketing activities largely focused on building awareness, educating end-users and channel partners alike about the real business benefits of these new inkjet printers for office colour printing."

First to market

Of the big four in the inkjet market, Lexmark has often been first to market with new technologies - not always with great success. It was the first to release a photo printer that would print direct from a digital camera memory card, but it was ahead of its time and didn't sell. On the positive side, the company was an aggressive early entrant into the MFP market and that has paid off in spades.

Lexmark's general manager for consumer and small business in Australia and New Zealand, Stephen Waugh, said the company now had a consistent 30-point market share of the MFP market - the highest it has ever been for an extended period.

Now Lexmark, which in the past has concentrated on the consumer and enterprise ends of the market, is targeting SMBs with a specialist All-In-One brand MFP.

"We've been strong in the retail and enterprise markets but never before done much more than dabbled in the SMB arena," Waugh said. "Now we have just launched the 7170 which is a specifically designed inkjet All-in-One for SMB. We also have a range of entry-level lasers and multifunction lasers that we have just released. So we are putting together a suite of products targeted at SMBs.

"About 18 months ago we appointed reps in each state to work with the resellers to help them develop their businesses and as a result we are seeing tremendous growth in the SMB market. The potential is fantastic."

Despite its aggressive pricing policies, Waugh said Lexmark's channel partners could still make good margins: "We specifically target dealers who don't have to compete with a guy around the corner that stocks one of our competitors.

"We target the leading resellers in each of the capital cities, nurture them away from our competitors and help them establish Lexmark as their brand in their shop. We don't spend a lot on branding, but our brand is out there and I think we have a reputation for having a good quality, low acquisition product that the dealer can make money on."

Looking to the future Waugh predicts wireless printing will be a big driver, particularly in the consumer market where broadband Internet is growing and camera phones are heading towards 3 megapixel resolution.

Epson's national marketing and communications manager, Mike Pleasants, agreed.

He said that while wireless was at an early adopter stage it was definitely catching on.

However, he warned resellers not to take anything for granted in what was a changing market.

"Inkjets are still booming and we are still seeing growth driven by the interest in digital cameras and everything surrounding them," Pleasants said.

"That's true for both the entry-level and the enthusiast and professional area.

"We have recently done quite a lot of focus groups with end-users and in the enthusiasts area they are knowledgeable and know what is happening.

They know inkjets can deliver as a good as a photo nowadays and they are aware that you need to use the manufacturers ink and paper to get long life out of your prints.

"But we found that when we talked to the general public there was still a lack of understanding that an inkjet printer could actually deliver something as good as a photo. So there is still some education that resellers and vendors have to do to get the message across.

"Where there is that understanding among consumers there also is an understanding that print life is one of the things they need to consider. In fact, it is now more of an issue than it was with traditional photography and there is much more of a hue and cry when prints fade.

"People are also looking at the difference between four and six-colour printing and starting to understand what six-colour can do such as better tones and gradation, more vibrant colours.

"The concept of dedicated six by four photo printers is catching on for home use and gaining a lot of momentum.

Alive and kicking

"So resellers need to understand a bit more about the little niches and the way the end-users are thinking because they can then help them to make their selection in the vast inkjet marketplace.

"The small business market is still alive and kicking and growing, but it's overshadowed by this whole talk of digital photography. Small businesses are generally interested in MFPs because they see the advantages of the space saving," Pleasants said.

"There is still enough difference to make the inkjet slightly more attractive, but it just depends on how cash rich the small business is. If they have the cash and need the speed they are probably going to look towards laser.

"Resellers need to understand what the best solutions are for different requirements.

"They need to step back and understand what is happening in the market. It is a time of change so it is not easy for resellers. It is not easy for us, that's why we have to keep doing focus groups."

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