Perspective on Printers - Dedicated followers of fashion

Let's face it, printers will never be the Versace frocks of the ITworld. But, says Marc Ambasna Jones, an eye for tomorrow's trend isexactly what vendors need to get ahead.

It is sometimes difficult to accept that regardless of how dull printers may be, the market is surprisingly aggressive. Printers are not products to set the imagination blazing, yet most people will accept that they will need one at some point.

In the printer sector, as in most others, it is the latest technology which tends to drive the market interest, and although colour technology is the printer's go-faster stripe, it is not the engine that will drive future sales. Contrary to popular opinion, dot-matrix printers, the market's traditional workhorse technology, will hold its own, while low-end page printers start to tread on the toes of inkjets. These are all signs that there are strange things afoot in the printer market.

Just when you thought you'd got it all mapped out, research statistics pop up and throw a custard pie in the face of all previous beliefs. Dot-matrix printers should surely have been dead and buried by now, yet according to research firm Info Source, the dot-matrix market is alive and kicking - and growing. Although Info Source admits that the 9-pin market is shrinking (by about 35 per cent for the first six months of 1995), the 24-pin market is showing signs of rejuvenation. Rival research firm Romtec disagrees, suggesting that the dot-matrix market is in significant decline, with a 21 per cent drop for the whole of 1995. Its research shows that 9-pin products dropped by four per cent while the 24-pin products dropped by 17 per cent.

It is not a clear picture. Most manufacturers involved in the market tend to support Romtec's research. Alun Williams, NEC peripherals product manager, agrees that the dot-matrix market is in the doldrums at the moment, but believes it will soon reach a plateau. 'Due to the fact that it can use multi-part stationery and that it is cheap to buy, it will still have a market,' says Williams.

'In fact, January is the best month for dot-matrix sales because after Christmas, when people may have received a PC without a printer, the dot-matrix is perhaps all they can afford.' If someone really wanted to kill off the dot-matrix, maybe they should invent a workhorse printer that can take multipart stationery. The trouble is, they would probably come up with something very similar to the dot-matrix.

Oki marketing director Peter Turner suggests that the dot-matrix is dead in the office environment. Other markets are increasing, purely on the basis that it is the only choice for multipart stationery. Oki has used the Info Source research to justify its continued interest in the dot-matrix market and claims that last year, sales were up by 28 per cent. So, there is life in the old dog yet.

Romtec has shown that throughout 1995, both the 9-pin and 18/24-pin products increased in price, by 13 per cent and 12 per cent respectively. This could have been a reaction to volume decline. If the dot-matrix has its assured market, there is no need to keep cutting its price to the bone, especially when it does reach its plateau. The dot-matrix is the IT industry's weeble; it wobbles but it won't fall down.

This market assurance has meant that the 24-pin product is neck-and-neck with the average inkjet price, at around #244, says Romtec. Inkjet pricing fell by 24 per cent last year, reflecting volume sales in the home and SoHo markets. Sales grew by 42 per cent, matched only by the growth of 0ppm to 6ppm lasers. Consequently the market is dominated by manufacturers with inkjet and low-end laser products.

Hewlett Packard is still the undisputed champion, while Canon, Epson and Apple are leading the chase. HP showed a massive growth last year, reaching 51 per cent by November, compared with its nearest rival, Canon, which showed a growth of 19 per cent. Epson's loss in market share during the year reflects the problems following its management restructuring, although the company managed an average annual market growth of about nine per cent.

Brother gained market share during the year, which is significant because it does not have an inkjet product. NEC has also had some success during the year, based largely on its GDI printer technology in the 0ppm to 6ppm category. This is a sector of the market that is starting to gain momentum. Williams admits that 'if you don't have inkjet products then you cannot dominate', but is well aware of the growing importance of the low-end page printers.

Samsung general manager Ali Demin has also recognised that the 0ppm to 6ppm market can steal market share from inkjets if the pricing is right. 'There is a new generation of more cost-effective laser products that can compete on the quality argument,' he says. 'The laser will always win in a quality argument with inkjets, so if you get the price below #300, then you have a product that can gain market share.' The obvious difficulty here is how to reduce manufacturing costs so as to enable manufacturers to get the price into the sub #300 bracket. NEC's GDI technology is one way: putting the processing onus onto the Windows printer driver, while not having to rely on a third-party engine, may also help keep production costs down. Samsung claims to have this ability and hopes that this will be reflected in the pricing of its new range of printer products due out later this month. The range will include a GDI printer at the bottom end while it will also take advantage of the increasingly lower cost dye sublimation colour technology. It seems the race is on to launch cost-effective 0ppm to 6ppm products in an attempt to target the traditional laser market.

Oki has just launched a sub-#300 LED page printer which, it says, will tread on a few toes. The Oki Page 4w is a 600dpi printer with a list price of #279, although Turner anticipates a street price of about #259, excluding VAT. 'A page printer is what people aspire to,' he says, 'and because it is below #300, it can compete strongly with the low-end inkjet market.' Where it cannot compete is in colour. The low-end market has been cited as a potentially big buyer of colour printers due largely to the educational demands of a home computer.

Colour capable inkjet printers have roused significant interest, but the colour market has its limitations. Turner says that although in the home and SoHo market some colour is required, printers are mostly used for mono correspondence. 'Our initial assumption was that the real market for the Oki Page 4w was the small business market and not necessarily the home market, but when we showed it to home users there was a division between those that wanted some colour and those that had no need for it whatsoever.'

This is a view supported by Demin. 'Apart from printing presentations and educational projects, there is little need for colour. It is the print quality that is the single most important issue,' he says. This raises the notion that offices may demand more than one printer: one for colour use, such as a dye sublimation or colour laser, one for high-quality mono output and perhaps even a dot-matrix for large documents. For home users wanting colour capabilities on a limited budget, understandably the colour capable inkjets are an obvious and popular solution, and until low-end laser printers can achieve colour capabilities at an affordable price, they will never be able to compete fully with the low-end inkjet market.

Mustafa Tanay, marketing manager at Mannesmann Tally, suggests there are other markets suitable for colour inkjets, although he accepts that it is limited as the print quality of mono page printers is more in demand in business sites. 'The majority of business communication is done in mono, but colour is perceived to be required by businesses of all sizes. As well as presentations, colour proofing in advertising and initial proofing of designs in Cad/Cam are increasing a demand for inkjets in the workplace because of their cost-effectiveness.' It is expensive to get colour proofs through thermal transfer. 'If you go into vertical markets, there are huge applications for colour,' says Tanay. 'It is just the general office environment that is limiting.'

This is where dye sublimation could come in and compete strongly. It is a market segment which is watched closely by Samsung, which intends to include a model in its new range. Samsung also manufactures all its own parts and, says Demin, can therefore look at ways of keeping production costs down and pass on the financial savings to the user. Turner also claims his company uses only its core technology for the same ends. If it can be well organised, it could put core technology manufacturers near the top of the pile. Controlling the technology is important, yet Hewlett Packard has managed to dominate the laser printer market through using third-party printer engines.

Fujitsu's printer product manager Terry Forester supports Demin's and Turner's claims that core technology manufacturers will eventually forge an advantage in the market. 'It will become more important from a cost base,' he says. 'OEMs will suffer a serious disadvantage, especially when the technology makers forge their own brand names.' It is doubtful whether this will make Hewlett Packard quake in its boots. As the leading manufacturer it will naturally come under fire from all angles. Last year it was GDI - HP has not joined the throng and developed a GDI product, probably because it would interfere with the strategy centred around its own printer languages. The market research figures support HP's strategy, yet many of its competitors argue that although its brand and sales channel dominate, its direction is questionable.

Fujitsu's attempt to gain market share has seen it pull out of the SoHo market to concentrate on business printing. Forester cites margin pressure as the cause. The company's only colour product is a dot-matrix model which concentrates on mono page printing. This market is becoming increasingly aggressive: Fujitsu is bringing out a 14ppm printer below #1,000 in an attempt to gain a foothold.

A shift in market focus can be damaging. Forester admits that problems can occur. 'There are still some glaring holes in the market,' he says. 'As manufacturers move into different market sectors they may not be used to the different issues involved. A low-end manufacturer moving into the medium range may not be used to the support demands involved. Each market throws up a different set of problems and each manufacturer tends to have its comfort zones.' Although one manufacturer may be settled comfortably in a particular segment of the market and service it well, there is always another company ready to steal its pillow. Like most markets, the printer market has its price erosion. The market as a whole saw a 15 per cent drop last year, according to Context, most of which came from inkjet and lasers, although 7ppm to 12ppm printers bucked the trend with a 42 per cent increase. This year is destined to see more competition in the low end between inkjets and 0ppm to 6ppm lasers which may prompt further erosion of prices.

One safe market may be colour. This will not be the year of the colour printer, yet as a high-margin product in vertical markets, dye sublimation, thermal and high-end colour laser technologies should reap some reward. It is also important not to forget the trend towards multifunctionality. These printer/fax/copier/scanner machines are a credit to manufacturing skills but have been met with widespread criticism in the industry. There is the argument that if it goes wrong, you lose four machines in one fell swoop and, of course, there is the old adage that too many cooks spoil the broth.

While the jury is still out on multifunctionality, the early whispers from the gallery are that it should be consigned to the museum, along with the Sinclair C5, the helmet gun and Kyocera's Refalo. It is a sign of the industry's willingness to accept the inherently dull nature of printers that prompts designers to come up with more ingenious ways of using a printer product. Perhaps we should look forward to the 'printer coffee's made' or the 'inkjet janitor'. Whatever the future holds, the dot-matrix printer will still be around and we'll still be wondering if anyone really can catch HP.

Printers are not environmentally friendly. The Advertising Standards Association said so when it rapped Kyocera's knuckles for suggesting its Ecosys range was in fact, environmentally friendly in an advertising campaign.

Kyocera's approach to printing and the environment is well documented, but there is an opinion that the company has forfeited its quality manufacturing image for a green one. Although it dropped the green campaign three years ago, it followed up with the cost of ownership issue, a highly valid argument that has won the support of environmental groups and department managers because it centred on costs and not ill-defined terms.

Kyocera marketing manager Neville Rawlings admits that considering the initial campaign for Ecosys, sales have been disappointing. But he adds that the cost of ownership campaign helped to pinpoint weaknesses and helped the brand to recover. 'Having a green product is somewhat meaningless,' he says. 'There are various shades of green which adds to the confusion. We recognised a commercial imperative that cost is the bottom line and therefore efficiency is central to any product policy.' Kyocera will still be remembered for being the green printer company, even though it no longer sells on this maxim. 'It's largely accepted as an efficient product that keeps running costs down because it is cartridge free,' says Rawlings.

The company is traditionally a premium seller, charging for what has been widely regarded as well manufactured products. But premium selling is a dangerous game and the company has realised that it has to compete in real-term pricing to maintain market momentum. A 4ppm Ecosys has a street price of around #350, above the 4ppm average, but is slowly closing the gap. 'Playing the margin game doesn't provide room for manoeuvre for your dealers. It's a fine balance between minimising your margin erosion and remaining competitive,' says Rawlings.

Kyocera perhaps found out the hard way how difficult it can be to create and then sell into a new market category, but it realised soon enough to build on issues which businesses recognise: costs and not whether a tree or two got cut down making the thing.

Rebuilding an image is a difficult job, although strong sales into the financial sector have given the company encouragement to pursue its current path. The market is fickle and will expect standard features and then look at costs. The one problem remaining for Kyocera is how to overcome the fact that printers and consumables tend to be bought by two different departments which fail to confer. Therefore, the IT buying department will look at the price and brand name and won't give a monkey's about running costs. That's someone else's problem.