Brother joins MFD family

Multi-function devices (MFDs) are being seen by vendors as the most promising segment in the Indian peripherals space. Top vendors are cashing in on this wave and aggressively pursuing the market. The newest entrant is Brother International. CHITRA PADMANABHAN analyses the company’s strategy

The company has planned an investment of $3 million over a period of three years and has launched a slew of products in the inkjet as well as laser category says ANAND KUMAR

OVER the past one-and-half years, the multi-function device (MFD) space has been receiving considerable attention. Earlier, MFDs were perceived as devices that catered only to the SOHO or SME segment.

Typically, an MFD enables an organisation to carry out various functions by using a single device at economical prices. The very nature of these devices make them ideally suited for the smaller business segment, but over a period of time corporate users have emerged as the big buyers. “Various innovations happening in the MFD space have given its various categories a clear classification. For instance, an inkjet MFD primarily caters to the home and smaller business segment, while a laser MFD has more usage in the corporate segment,” says R S Anand Kumar, country manager-India for Brother International. While players like HP and Epson are the front-runners in this space, Brother has recently launched eight products in the category, with four each in inkjet and laser, targeting various segments of the market.

Reflections

Though Brother may seem to be a late entrant in the space, recent figures by analysts show that the demand for MFDs is growing at a fast clip. IDC points out that inkjet MFDs are expected to grow at a CAGR of around 82 percent between 2004 and 2006, while laser MFDs will grow at a CAGR of around 40 percent during the same period. The home segment, along with the entry-level commercial market within inkjet MFDs, is expected to provide the biggest growth opportunity.

Brother plans to cash on the encouraging trends predicted by analysts as well as its observations of the market elsewhere in the world. Says Anand Kumar, “Brother has experience of doing business in the US and Europe. Our observation is that similar trends emerge in every location with a slight time gap. Earlier, the time gap used to be as long as three years, but in the current phase the gap is not more than six months.”

2004 is likely to witness the addition of more value-added features such as digicam card slots, photo colour reproduction and superior scanning facilities. HP provides digicam card slots in its various inkjet all-in-one-models, while Epson has recently launched an MFD for the photo segment. In order to grab a significant share of the MFD pie, Brother has launched state-of-the-art products. “We have launched a slew of models catering to different segments, applications and price points in the inkjet as well as laser category. Our prices are market-compliant and are designed in ways that are likely to give our customers total value for money,” says Anand Kumar. Analysts also predict that in the current year the affordability of laser MFDs is likely to increase, allowing further penetration in the corporate as well as MFD space.

Market strategy

Though the market is highly conducive for the expansion of the MFD segment, any new entrant will be leveraging on the opportunity only when it has its distribution and service strategy in place. To ensure the same, Brother has appointed Godrej & Boyce as its Tier-1 distribution partner. “Godrej & Boyce-Prima Division has been the distributor for our fax machines and we have now appointed them our distributors for MFDs as well. The company’s distribution network includes a direct presence in 14 locations with several authorised partners,” says Anand Kumar. The company shows preference for a distributor who is not in the business of distributing similar products for other vendors but at the same time is well aware of the market. Godrej is the largest distributor of fax machines in the country. Specialising in the office equipment space, the company has a well-set infrastructure for carrying out service initiatives. Though MFDs cannot be seen purely as office equipment, setting up the devices requires high-end network capabilities which go much beyond the normal service levels required for a device used in the office. “There is a trend in the market where channel partners are emerging as total solution providers. They are no longer seen as mere box-pushers. With the launch of our MFDs we are replicating this trend in the true sense since our distributor is well-equipped to provide high-end services,” says Anand Kumar.

Brother has laid down a three-year strategy to make its mark in the MFD space. The company has planned an investment of approximately $3 million over a period of three years, though most of the funds are likely to be spent in the initial phase itself. With a sound service strategy and good understanding of the market, Brother is all set to make its entry into the MFD space and is looking forward to being counted as one of the most respected members of the peripherals family.

IDC bullish on MFD space

IDC considers MFDs one of the most vibrant segments within the Indian peripherals market, and expects it will continue to be one of the biggest growth drivers. Inkjet MFDs are expected to grow at a CAGR of around 82 percent between 2004 to 2006. Laser MFDs will grow at a CAGR of around 40 percent between 2004 to 2006. The share of inkjet MFDs within the total MFD pie will increase over the next two to three years. Growth for the year 2004 over 2003 in the inkjet MFD space is expected to be over 100 percent; for the laser MFD space it is around 55 percent. The growth estimated for flatbed MFDs for the period 2003-2007 is estimated to be 119 percent CAGR as opposed to 21 percent CAGR for sheet-fed inkjet MFDs in terms of units.

chitra@expresscomputeronline.com