Wednesday, December 9, 2009

Can Ricoh, Xerox, Canon & KonicaMinolta be the next GM & Chrysler?

For those who know me, they know that when I'm traveling from appointment to appointment I never listed to the radio, or cd's.

This was not by choice, my buddy Darby (185lb dog), knocked out the SIRRUS antenna one day while getting out of the car and along with the fact that I lost the code for my regular radio, well my rides are pretty dam quiet w, except for the rambling thoughts cruising through my head all day!

Thus this came to me the other day when speaking with a fellow p4p'er in Florida. We got on the topic of A4 devices, my question was "Why have the Big Dogs like Ricoh, Xerox (Xerox/Fuji), Canon and Konica Minolta not come to market with their own A4 devices? Well, the answer I got was surprising and made sense. My fellow p4p'er stated that the Japanese are reluctant to re-tool the factories due the cost involved. There is no money made on the hardware anymore, they are relying on the consumables for profits.

Hey, I'm the guy in the field, on the streets and in the trenches, my customers love the A4 devices that we have from Sammy (Samsung), and if you haven't heard Sammy is doing very well with their A4 devices.

About a year ago Sharp launched their Frontier Series which is an A4 multifunctional device made by Sharp. Just today BLI awarded them "BLI Pick of the Year Awards" for three different models. At a recent Sharp dealer meeting it was noted that 24% of placements in 2008 were A4 devices.

So, while the chickens are roosting in the hen house at night, companies like Sammy, Sharp and Muratec (relabled Sammies) are quietly taking market share from the likes of Ricoh, Xerox (they also relabel a few Sammies), Canon and KonicaMinolta. Gesh, I would have thought by this time that the Big Dogs would have at least stepped up to the plate.

I reached out and made another call to a prominent p4p'er and got these quotes:

* Samsung certainly is doing quite well with its A4s.

* I feel like the reason Sharp is so hot for A4 is because they realize they cannot beat the big dogs at their own game (A3s) so they are looking to build share through A4 while maintaining or slowly growing A3 share. Man do they say how great A4s are every chance they have though. Not sure where this was sourced from, but at Sharp's dealer meeting they said that A4s were 24% of all MFP units in 2008 and 35% of all 31ppm+ MFP unit growth between 2005 and 2008.

* Most of Xerox metered A4s are either sourced from Samsung or most recently Konica Minolta so that's a sign that they don't want to retool and are looking externally for their A4 lines. That said, FujiXerox does make A4 engines for Lexmark and Infoprint, so they have the ability.

* Considering Canon supplies HP with all those A4 engines I would think they would expand in A4 if they wanted. They are probably limiting A4 presence for different reasons.

Ah, Canon the biggest dog of them all and why haven't they entered the market? I'm thinking they have some type of agreement with HP. WOW, we forgot about HP, here's another instance where HP is now replacing their own laser printers and others with their own A4 Multifunctional devices. Yet, all of this is one of the least talked about topics and the mass migration of A3 to A4 is happening before our eyes.

I read an article today from Channel Web, where a representative from Gartner stated "recommended customers use fewer A3-sized printers, which print at 11 x 17 inches, and adopt more A4-sized devices, which print letter-sized documents, to cut costs."

Sammy is poised to steal even more business, if you think they're satisfied with four or five A4 multifunctional devices, well you're wrong. They want to be the manufacturer of choice for dealers in the near future.

So, back to the topic, if the Big Dogs don't a make a move soon with their own A4 platforms where will they be in two years. I'm thinking they could go the way of GM and Chrysler, they've rested on their laurels and their A3's engines far too long, and instead of investing money in new factories and re-tooling, they all opted to buy market share by purchasing the likes of Savin, Oce, Global, Danka, Gestener, Ikon, Monroe, and Imagagistics. Did I miss any?

BTW, special thanx to the p4p'ers that helped me out with the additional information. If you like to be a member of the largest and fasted growing group of copier professionals in the world, then take a trip here. Print4Pay Hotel

-=Good Selling=-


Ddude said...

Those of us who have been in this field for any length of time know that Canon was the king of placements for many years during the '80s and '90s, and the reason that they were leaders in market share was their unusually high percentage of segment 1 machines, almost of which were A4. What's old is new....

Anonymous said...

Good post Art and something we have to consider. I think the Big Dogs know the competition for the comsummables for A4's will become a Staples/OfficeMax etc. product. The Big Dogs are trendong toward Managed Print Services (MPS) and Software as a Solution (SaaS) for their future. It's stil a "click" business and the more you can grasp as revenues "per click" dwindle the better off you'll be. The A4 boxes offer value just as the Corrolo's and Civic's do though not as much profit.

Greg Walters said...

Well...4 years ago, HP showed us data that confirmed 11x17 WAS NOT used more than 3% of the time, yet, 98% of the devices sold had the 11x17 "option" HP limited the number of manufactured devices utilizing 11x17.

They were rediculed and lambasted by the "copier" guys.

Indeed, a common talk track when confronted with HP devices as a competitor, spoken by copier schleps went something like, "...look how little that machine is..and it only costs five thousand. It can't possibly last as long or perform as well, or be as robust as my FILL IN THE BLANK copier..."


Well - the future ain't what is used to be, and it is NOT in hardware.

There was a time when IBM sold desktop PC's, Servers, Printers, and Laptops - huh.

Great Post! Great Comments.

Art Post said...

Thanx for all the comments! Greg, need you to log in here follow the registration process and then read the Xerox MPS threads!

paulinmacon said...

We're a brand new Konica Minolta dealer. While going through the laborious approval/ordering phase, we were able to place quite a few Muratec B/W 45 cpm and Color 40 cpm units. Pricing is great, therefore margins are also very good, and they seem to be very good in the field. You have to watch where you place them though, as higher volume locations will neutralize the pricing advantage because of higher cpc. Couldn't use in some bid situations where customer insisted on hole punch.