Perspective on Printers - The Specialist

Simon Meredith looks at what's on offer in the burgeoning market ofspecialist printers.

For resellers, printers are not exactly a gold-mine these days, being low-cost, low-margin items. Unless, that is, they offer some kind of special function or performance.

'Special' might mean the accuracy of colour reproduction, the ability to print at high speed on multipart continuous stationery, or the accuracy of printing Cad drawings. But the trouble with these is that the printer is usually sold as part of a complete solution. And where it is not, competition builds up quickly.

Printers that have specialist functions, rather than those designed for specific applications, provide broader opportunities for the majority of resellers. There is no question that there is money to be made from selling high-performance printers for use in shared network environments. A 30ppm laser printer costs about #15,000 and a 40ppm model could sell for as much as #25,000.

But dealers are not exploiting the opportunity to the full, says Ed Stanislawski, marketing manager at QMS. 'I think dealers probably aren't aware enough, particularly in the network environment.'

Resellers can sell high-performance printers on the basis of a cost-saving return. In the lower end of the market, the cost per page of 4ppm and 8ppm models is always going to be about 1.5p or 2p, says Mike Hare, business partners manager for specialist printer manufacturer ATI. But higher performance models that turn out 40ppm or 60ppm can produce pages for 0.75p and 0.5p.

Hare says: 'People who are used to paying a few hundred pounds for printers don't want to pay any more. But if they really did their sums, they would realise that they could save money and get more features and higher reliability from a departmental printer.' The raw cost per page is not the only factor that network users need to consider. 'Very often, the departmental printer allows them to control printing costs,' says Hare. 'With desktop printers they don't realise exactly how much they are spending on print.' If companies can be persuaded, they will become more dependent on a small number of printers, making maintenance cover more attractive. ATI always sells maintenance on its printers and Hare says customers never question the need for it.

But ATI itself provides the cover; resellers are excluded. The vendor works with several specialist Vars that provide ATI printers as part of turnkey solutions. Hare says the company is rarely approached by dealers.

Vendors offering network and specialist expertise are increasingly working with a selective part of the channel.

Rank Xerox has 80 resellers in the UK and focuses on developing business with this group, primarily because its printers are different, says business team manager Simon Hill. 'They are mainly mono lasers and networked. Until we brought out the 4508 (an 8ppm model), around 85 per cent of our sales were of network products.'

Selling high-performance printers is not just an opportunity to sell a box that costs more, says Stanislawski. 'Printers on networks can cause a lot of problems and therefore anything we can do to assist the network manager in cutting down those problems will be of some value.'

But the value of service contracts for printers is debatable. ATI can provide scheduled maintenance cover on a 30ppm printer for #160 a month, and ATI includes this in its cost per page quotes. Most resellers can't afford to provide cover as part of a separate deal. Maintained printers would have to be included in a larger, all-encompassing contract, or subcontracted out.

Companies with specialist needs are also good targets for the more expensive printers. QMS and ATI both supply printers that can output TIF or Postscript files at high speeds, and colour has become a major selling point for specialist applications. In the Mac market, Stanislawski says the QMS 1660 is popular because it can print full-bleed colour on A3 paper.

There are also opportunities for non-specialist resellers in the specialist printing market. Philip Wood of Mitsubishi Electric UK's peripherals division says dye sublimation printers are falling in price and have wider appeal.

Last year, Mitsubishi appointed two distributors, Principal and Qudis, to handle its peripherals products. 'It is still mainly a niche or specialist dealer product. But when you are talking to someone who's looking at a 21in Diamondtron monitor, they are the sort of people who'll also be looking for pre-proofing printers,' says Wood.

An A4 'dye sub' now sells for about #5,000 and A3 models with Postscript level 2 are available for less than #10,000. The cost per page is about #6 on a dye sub, creating a strong market for resellers who can supply consumables as well.

The capital and the page cost may sound high compared with colour lasers or inkjets, but they will be attractive to any firm spending hundreds of pounds on cromalin proofs to check artwork before it goes to press. Cromalins are still the preferred means of proofing in the pre-press market, so there is potential for dye sub printers.

But although they have improved in recent years, dye subs don't yet deliver the precise colour reproduction demanded by most companies. At the moment, inkjet and solid ink printers are used to produce cheap proofs where precise colour reproduction is not crucial.

There is a market for a machine somewhere in the middle, one that could produce high quality documents for using in presentations. Where high-speed output is important, colour lasers are predominant and still sell for healthy prices.

But price and competition are already eroding the opportunities. At #5,500, Tektronix' latest 5ppm colour laser, the Phaser 550, is 20 per cent cheaper than its predecessor. According to Tektronix's European PR manager, Marion Obergfell, the cost is coming down all the time. 'Obviously it depends on the amount of colour you want on the page, but the typical business user fills between five and 20 per cent of the page. At the lower end of that, you're getting about the same cost per page as monochrome printers. There will come a point when colour lasers carry little premium.'

Vendors are responding by putting in special features to justify higher prices. Citizen's small-footprint PN60 sells well as a companion to palmtop computers, says Tektronix European regional manager Gareth Cornish. 'There is more money in it for dealers selling an HP or Epson inkjet because there is a better margin,' he says. That may be so, but at around #300, it needs to be sold as part of a large deal to generate significant profits.

The same is true of the Tek-tronix Printiva solid ink colour printer. It is small and produces excellent colour output but, at just over #400, it's never going to be a great money-spinner beyond the retail sector. Similar printers made by Citizen, Star, Epson and other Japanese printer vendors are also targeted at specialist point of sale and barcode markets. Their printers cost more but tend to be sold through specialist channels. Citizen's latest barcode printer will print the new PDF417 barcodes and carries an RRP of #1,599. It is distributed by two specialist firms - Fairfield Labels and Celgray.

Printer sales in specific areas such as Cad are almost exclusively the domain of specialist resellers, though competition and serious price pressure is common. Cad was once a goldmine but new technology has knocked the sales value of Cad systems for six.

Gerard Boulay, European sales manager for plotter vendor Summagraphics, says: 'It's so difficult to sell a pen plotter now. This market is declining very quickly. People who need pen plotters are in a niche; the main market is in inkjets.' Summagraphics recently produced a range of 600dpi inkjet plotters, costing about #1,600 - a snip compared with the five-figure prices of some pen plotters.

Resellers specialising in Cad, graphic design, point-of-sale, warehousing and manufacturing applications all have good opportunities to sell printers that carry a high value, high margin and good after-sales. But these printers will almost always be sold as part of a total solution.

For the rest, only the expanding pre-press market looks promising. Otherwise, it is a matter of making the most of printers that are different because of their functions. The best bets for the near future include high-speed network printers, colour printers and portable ones.