As exciting as they may be for consumers, the reality of scanners for the channel is that they aren't top-of-mind products and are certainly unworthy of the emphasis dedicated to PCs or networking - or even printers for that matter.
That said, scanners do draw a large market of consumers, both professional and home-based, which makes it a product worth carrying, not so much for the margins, which are fairly unimpressive in the current competitive climate, but for the ability to provide total solutions and thereby retain customers.
Over the last 12-18 months, Mike Pleasants, Epson's marketing director, feels that scanners have shaken their label as a "dark art" and entered the comfort zone of the everyday user.
"Scanners were typically considered hard to use and didn't produce good results. They had this Twain interface which confused people and relegated scanners to the province of graphics professionals," Pleasants says.
The reason for the transformation is two-fold. The first is that prices have come down through a combination of cheaper manufacturing and heightened competition among vendors. The second is ease of use made possible by smarter software and some intuitive development by vendors.
"Home and professional users are taking scanners on board and getting good results. The software performs a lot of the processes for them, which encourages them to buy it as an additional peripheral," says Pleasants.
The ability of "smart" scanners to take the complexity out of scanning is a strong focus in Hewlett-Packard's latest models. Peter Leihn, HP's Australia and New Zealand marketing and development manager for peripherals and appliances, says the vendor is actively trying to cut the number of steps a user has to go through to carry out functions, particularly frequently performed operations.
"The new HP scanners have one-touch buttons on the front for scan to CD, scan to fax and even scan to Word or Excel if the user programs the machine to do so," explains Leihn.
He says the concept of yesteryear to bundle OCR (optical character recognition) applications with scanners is fading. "We tend not to give those applications away anymore because most users know what they're doing and tend to select their own software. Bundling software is not our selling point; we're bundling features."
As far as Leihn and Pleasants are concerned, the SOHO market is what keeps the scanner units ticking over. The acceptance of digital archiving in the corporate world, which for some time boosted the popularity of scanners in the sector, has slowed.
The renewed focus on the consumer division has seen retailers like Harvey Norman establishing digital imaging centres inside stores, giving vendors an avenue to volume sell at low cost.
"Scanning has come full circle," says Leihn. "It's like a printer or a digital camera. It's just a matter of getting something digitised, so much so that the numbers are starting to catch up to inkjets."
But Earl Woolley, managing director of information management software vendor doctrieve, disagrees. He believes the value proposition of scanners does not have to end with the simple capturing of a photo or a document.
"Capturing a magazine article or image adds very limited value to a business - people are looking for solutions," Woolley says.
"Vendors should be incorporating software that supports the scanner technology, but instead they're building a machine that de-skews or de-speckles, and that's not value-add."
On the other hand, Woolley says this gives the channel an opportunity to couple software with hardware products and build solutions. In doctrieve's experience, the unwillingness of scanner vendors to manufacture management software has turned the bundling concept back to front - instead of hardware vendors adding the software, resellers are buying the software first then looking for hardware to match.
"We have customers asking us what kind of scanners they should be rolling out with our product," says Woolley.
Canon also sees a strong value proposition in coupling quality software with scanners to create an information management solution. The vendor already provides this service to high-end customers via its direct sales arm and encourages its resellers and distributors to do the same - either using its software or that of third-party developers like OmniPage or doctrieve.
"The demand for document management in the corporate sector hasn't gone, it's just that the spending has been delayed," says Suzannah Donnelley, product manager for Canon's consulting and solutions division.
However, Woolley argues that the economic slowdown will spur the ongoing requirement in business to cut costs - automating businesses processes is a logical way to achieve this. "In the last three months we've opened offices in Singapore, Hong Kong, Thailand, Malaysia and Indonesia based on the volume of demand. Companies need to acquire, manage and protect their data sourced from and going to a variety of places, one of which is scanning," Woolley says.
"Resellers have no choice but to understand businesses' needs for information management - it's not rocket science."
Agfa, a vendor that is placed squarely in the imaging side of the market, has decided not to travel down the price-erosion road, announcing the worldwide closure of its digital imaging group, including its scanners and digital cameras, at the end of this year.
Marek Olech, Agfa's national manager of consumer digital imaging (CDI), says the decision was made at a senior level to carve the future direction of the company (Agfa has a healthcare and business graphics division) not because of a poor success rate. "Australia has done particularly well from a regional point of view. In the last three to four years we've gone from being a total unknown in the retail market to being up there in the top three," Olech says.
He believes there is still a lot of room for pure imaging to grow, not just in hardware terms but with value-adds such as Web-based mini-labs. Still, the decision by Agfa suggests that it sees a significant shift in the value proposition of digital imaging hardware in the future, one drastic enough to justify the culling of its entire scanner range.
Meanwhile, the price drop is affecting
everyone's margin along the food chain. Vendors are looking for more efficient manufacturing and supply-chain processes and the channel is competing as aggressively on scanners as it currently does on inkjets. Unfortunately, in the case of scanners there is no ongoing business in terms of consumables - that precious silver lining that makes printer sales bearable. One effect of the maturing scanner market is that service and support requirements of machines are decreasing significantly as the technology stabilises. So while resellers aren't making mega-bucks on unit sales, they're less likely to lose money.
The bundle bungle
One of the wishful concepts that has fallen flat, despite significant pushing from retail outlets, is the selling of scanners as part of a complete computing hardware solution alongside PCs and printers. There's certainly no doubt that vendors would love it to be so, however the consumer tends to be uncooperative in carrying out this game plan.
"We like and encourage resellers to sell bundles but it doesn't usually fit the buying process of the end user," says Epson's Pleasants. "End users tend to think of the PC and printer as a sensible bundle to get them going. The scanner on its own is a more popular sale."
A threat perhaps as great to the scanner market as disappearing margins is the increased use of multi-function devices in small businesses and home offices.
Says Pleasants: "I haven't seen the latest figures, but there is a thinking that If I can get a nice, relatively small footprint device that performs three functions for the same price, why should I get a separate scanner?'"The counter-argument is that consumers should buy a separate scanner if they require high-quality imaging. "If you want really good-quality scanning you need a device that is dedicated to that function. A jack of all trades will always give you some compromises," says Pleasants. "You probably could wrap up best-of-breed in the one device but the cost would blow out."
Meanwhile, others in the industry feel the impact of multi-function devices is minimal at best and will remain so. Still others feel the rapid uptake of digital cameras has a greater chance of usurping the scanner market.
"Digital cameras are taking off and will take a greater share of the market than scanners," says Agfa's Olech.