Rising demand for color perks up flat copier sales
Susan Avery -- Purchasing, 1/16/2003 2:00:00 AM
One bright spot on the copier landscape: Growing buyer demand for color.
Shipments of single-function digital copiers have been flat for some time and while manufacturers assert that the machines are here to stay, forecasts don't show much change in demand. Meanwhile, sales of copier-base multifunction products (MFPs) (devices that print, scan and fax as well as copy) are increasing as corporate buyers continue to optimize their companies' fleets of office equipment.
When asked about demand for their products in the past 12 months, copier manufacturers like to talk about rising sales of color copiers.
Considered pricey by many buyers, color copiers—with the introduction of some new products in 2002—are becoming more efficient and less costly.
The next 12 months should present few buying challenges: Prices are expected to remain competitive and availability should pose few problems (the West Coast dockworkers' strike caused only a minor blip in delivery leadtimes). And, manufacturers will continue to introduce a stream of new products: Specifically, purchasers can expect more emphasis on new document management software.
Faring well, considering
For third quarter 2002, copier sales reached $3.9 billion, down 4% from the same period last year, according to Gartner Dataquest. "Copier and printer companies have weathered the economic storm fairly well this year compared with other information technology products," says Andrew Johnson, vice president for Gartner Dataquest's Digital Document and Imaging group.
Looking ahead, a Gartner Dataquest forecast shows shipments of monochrome copiers (with print speeds of 21-69 pages per minute) growing about 5% annually through 2006. In 2001, producers shipped 603,867 of these copiers. Many of these units will be capable of being connected to computers and producing color copies.
For color copiers specifically, after increasing 21.8% in 2002, revenue from sales should remain flat through 2003 (due to lower average selling prices) and will grow in 2004 by about 7.35% to $1.67 billion.
Word from copier manufacturers is that corporate buyer demand in general is showing little growth. "From our perspective, there are shifts occurring in market share," says Dennis Amorosano, director of marketing and assistant general manager, Canon USA Copier and Networked Office Systems Division. "That's how growth is being achieved today. I think a majority of players are fighting a difficult battle in trying to maintain share and grow their business. Some are showing some success, most of which is coming at the expense of other players."
It's not the economy. "Even when the economy was doing extremely well 12-18 months ago, I think the overall copier marketplace to a large extent would still have been characterized as low-growth," says Amorosano. "The economy hasn't had a negative impact on our existing business other than maybe in the area of color."
Beginning late last year, corporate customers slowed down equipment purchases where they could and the market was soft, says Cathy Lewis, senior vice president of marketing for IKON Office Solutions, Malvern, Pa.
The trend is toward more prints, agrees Mark Burris, manager, Document Centre product marketing, Xerox Corp., not a decline in copies, but a flattening of copy volume in the office environment. The digital copier market remains strong."
Strike impact
The West Coast dockworkers' strike appears to have had minimal effect on copier shipments to corporate buyers. Manufacturers, for the most part, planned ahead and were able to alleviate delays in delivery.
"We experienced some availability issues due to the dockworkers' strike," says Steve Rhorer, director of product marketing, Toshiba America Business Solutions. "For the most part, we caught it in time. We shipped a lot of inventory by air in order to supply our customers and dealers with product. We planned well so the strike didn't have as big an impact as it could have had."
As a result, corporate buyers should see no lengthening of delivery leadtimes. "Generally speaking, we carry enough inventory to meet normal demand," says Nathaniel Gifford, vice president of product development and marketing, Imagistics International. "I think most companies do. A very large order or a customer with specific requirements is dependent upon factory leadtimes, which are typically within most ordering windows."
More for money
Copier color capability has become less stodgy from a speed perspective, points out Burris of Xerox, which like many manufacturers is focusing R&D on color copiers and printers. Last year, Xerox introduced its 2240 Printer/Copier and DocuColor 1632 Printer/Copier both of which produce color prints and copies for less than 10 cents per page.
Toshiba introduced new copiers with color capability: Launched in April, the e-STUDIO210c can copy up to 21 color/31 black pages per minute (ppm), while the e-STUDIO310c can output up to 31 color/black ppm.
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