Universal Copiers & Printers: The Next Big Thing19 Mar, 2004 By: Jeff Hayes imageSource
Universal Copiers & Printers: The Next Big Thing
new generation of output technology has the potential to change the structure of
the $40 billion U.S. office printing and copying industry. Over the last 20
years, we have seen a series of advances in engine design, marking materials,
media and controllers that have created new economics and opportunities for the
industry. With the migration to connected digital copier/printers almost
complete, CAP Ventures believes the next “big thing” in the office will be the
migration to universal copiers and printers (UCP).
What is a UCP?
We all know that black & white copiers and printers can only print or copy
in black & white. Color copiers and printers, on the other hand, have always
been able to produce black & white pages as well as color. However,
color devices typically output black & white pages at lower speeds and higher
operating costs than dedicated black & white devices. They also have higher
equipment costs and lower duty cycles that make them unacceptable for everyday
Universal copiers and printers (UCPs) are output devices capable of printing
and/or copying black & white and color pages with comparable performance of
dedicated devices. UCPs offer competitive capital and operating costs,
competitive paper handling capabilities, are easy to use and reliable.
Recent advances in imaging technology and new engine designs are bringing a new
generation of devices capable of printing and/or copying black & white and color
pages with little or no performance difference than dedicated devices. Some
people call these products “color-capable” black & white devices. At CAP
Ventures we refer to them as UCPs that are designed to handle all the jobs in
the office. More importantly, we believe these devices have the potential to
transform the office equipment industry and present unique opportunities for
manufacturers and dealers.
Impact of New Innovations
Back in the early 1980’s the new innovation was cartridge-based laser
printers. These products helped usher in the desktop printing revolution by
bringing speed, convenience and high quality at acceptable equipment and
operating costs. HP and Canon teamed up to develop and bring these products to
market, and they still have the dominant position in this $16 billion U.S.
market twenty years later.
next big thing was inkjet printers. These devices brought printing to the
individual and into the home with acceptable speed, quality and color
capabilities at very low equipment costs. Although the operating costs were and
remain high, customers greatly value the ability to print at their desktop. HP,
Lexmark, Epson and Canon are the dominant players and have leveraged their
technology to move into large format printing and home photo printing. CAP
Ventures estimates that inkjet printing in the office is around $2 billion
market in the U.S.
more recent office product innovation was the digital copier with a controller
and network interface, better known as a multifunction device. These
copier/printers enable scanning, copying, printing, faxing, and document
management all through a single device. Since their widespread availability over
the last ten years, CAP Ventures estimates the percentage of office pages output
on digital devices (vs. analog) grew to nearly 85 percent in 2003 from 40
percent in 1996. During this same time period, the percentage of pages produced
on multifunction devices (vs. single function printers and copiers) reached
nearly 20 percent in 2003 from less than 1 percent in 1996.
During these transition periods, there are unique opportunities to sell new
equipment and capture incremental market share. The last five years of digital
and multifunction product innovation has provided customers with a compelling
reason for buying new office equipment. However, as the installed base is turned
over, the impact of this value proposition is diminishing. All the vendors are
offering them, and most of the customers have at least one.
New Growth Opportunities
While turning over the installed base from analog copiers to digital ones
provided a one-time boost, for the office equipment industry to grow, it also
needs new sources of pages, especially more valuable color pages. With continued
improvements in speed, equipment costs, operating costs, paper handling,
reliability and other important factors, CAP Ventures believes color output in
the office will grow nearly ten times faster than black & white pages over the
next five years.
Fueling this growth is the latest generation of marking engines that has
dramatically higher print speeds with excellent print quality at equipment
prices that are a fraction of prices even a few years ago. Recent product
introductions from Canon, HP, KonicaMinolta, KyoceraMita, Lexmark, Okidata,
Ricoh, Toshiba and Xerox have dropped the price of color by half while providing
much better speed, duty cycle and paper handling.
New Price Performance Levels
As each new color engine platform establishes benchmarks for price
performance, there is the potential to capture pages produced in centralized
locations and to migrate pages to color from black & white devices. The new
Canon 3200 copies and prints at 32 pages per minute in black & white and color.
The KonicaMinolta 8050 outputs color and black & white at 50 pages per minute.
At these speeds, CAP Ventures believes there will be a shift in digital color
print volume back into the office over the next five years. This shift will
place pressure on traditional quick printers and other color copying service
providers to move up market (longer runs) and more document finishing services.
Potential Office Page Shifts
The Color Trojan Horse
In recent surveys CAP Ventures has conducted with office equipment decision
makers, we have found widespread interest in the UCP concept. People understand
the concept and see it as the natural evolution of office equipment. More
importantly, they are very attracted to some of the key benefits of UCPs
Ability to print documents with color and black & white page
Faster color output speed
Better utilization of equipment
examining the copy and print volume in the office, our research suggests that
around 60 percent of all pages could benefit from color. We believe a large
portion of these pages will migrate to color at the right cost per page, which
is somewhere around three to five cents for toner and service. The key is to get
the device into the office and then focus on those applications that will
benefit most from color such as presentations, brochures, marketing collateral
and reports (see Figure below). Once the device is in the office and on the
network, usage rates typically climb and end users become used to working with
color. Once the genie is out of the bottle, it is hard to go back to the old
black & white way. A recent survey by CAP Ventures revealed the largest color
Largest Color Applications
N = 138 U.S. and European companies
UCPs represent the best opportunity for sustained growth of office copier and
printer placements and service/supplies revenue streams. There are millions of
workgroup copiers and printers installed worldwide producing billions of pages
per year. CAP Ventures analysis suggests that if only ten percent of the pages
shift to color, the U.S. market will grow by around $10 billion in incremental
toner and service. This is a huge increase for the equipment manufacturers,
supplies vendors and the distribution channel.
the same time, office equipment manufacturers risk losing significant share and
page volume by not having competitive products in the emerging universal
copier/printer segment. Given how competitive the current copier and printer
market is, if a vendor is not participating in this emerging product segment
they could be shutting themselves out a large part of the deals.
office equipment dealers, CAP Ventures believes UCPs are a great opportunity to
grow your business in an increasingly competitive market. UCPs involve a
consultative sell that includes identifying copy and print volumes, profiling
applications, determining outside spending on copy services and coming up with a
recommendation for a better equipment deployment. This type of sales model
favors dealers with outbound sales representatives and solutions experts.
The time has come for UCPs. We believe new advances in imaging technology is
resulting in lower equipment and operating costs, higher speeds, better paper
handling, and higher duty cycles that will enable customers to consolidate their
office output equipment and have widespread use of color. Customers are ready
for these solutions today. The rate at which the market transforms will be a
function of how fast the manufacturers can bring compelling products to market.
From there, it will be up to the channel to make the case for migrating
applications to color and replacing traditional black & white-only printers and
copiers. We believe by the end of this decade the office equipment will be well
into this transition and that the future leaders will be those companies that
are aggressive starting now with their product development and marketing.
- - -
Jeff Hayes, Director of Research at CAP Ventures,
has nearly 20 years experience conducting strategic market and product
positioning studies for leading firms in the office equipment, graphic arts and
electronic publishing industries. Hayes, the father of four children, spends his
free time picking up toys and anguishing over the Boston Red Sox. CAP Ventures
is the leading consulting and market research firm for the document technology
and business communications industry. For information about CAP Ventures, please
call 781-871-9000 or visit the web site: