Peripherals

DMPs, colour printers and LCDs find favour

While dot matrix printers dominate the transaction printing scene, colour usage is on the rise and companies are going in for LCD flat panels, says Chirasrota Jena

Although small businesses have focussed mainly on systems, peripherals are not far behind. According to the survey, small businesses apportion 12 percent of their IT budgets to peripherals. The banking and financial sectors have invested significantly in peripherals during the last fiscal. FMCG, consumer durables and BFSI are the three segments peripheral manufacturers will target this year.

Demand for operational efficiency and better print quality coupled with increased awareness about printing costs have prompted manufacturers to offer a wide range of products in the printing and imaging segment. The Indian small businesses constitute a robust source of revenues for printer manufacturers. Efforts by leading vendors to expand the market using all possible measures like extensive product promotion, multitude of exclusive sales offers, heavy price discounts and the increased availability of application-specific printers have contributed enormously to the utility of a printer today.

Dot matrix’ strong show continues

Because of their low cost of printing and the rugged nature of dot matrix printers (DMPs), small businesses prefer them. The three main requirements for small business houses are multiple copy printing, multi-purpose printing, and a rugged product that provides good return on investment. Dot matrix printers (DMPs) are therefore the best option for them.

"DMP volumes have grown for the third consecutive year and touched half a million units. TVSE has seen 15-18 percent growth in sales to small businesses" - S Narendran Head, Marketing TVS Electronics

S Narendran, Head Marketing, TVS Electronics (TVSE) says, “The year 2005 saw significant action in the DMP market. The volumes kept growing for the third consecutive year and touched half a million. TVSE has seen 15-18 percent growth in the sales to small business customers in the past few months of post-VAT implementation. The demand will go up by 20 percent due to VAT implementation in all states.”

According to the survey, the presence of dot matrix printers in the education and textile sectors is significant. And, 36 percent of BFSI respondents are planning to invest in DMPs. Deep Kumar Sonakya, Senior Vice-president, PNB Housing Finance says, “We have 28 DMPs, 15 inkjets and 30 laser printers in our branches across India. But we prefer DMPs while taking large volume printouts as they help cut costs.” He further added that with expansion, the company would add more DMPs.

Laser and inkjet gaining ground

Educational institutions like SRM Medical College are transitioning to laser and inkjet printers for their day-to-day printing. Elaya Raja, System Administrator (IT) at SRM Medical College says, “The latest offerings from the vendors along with reduced prices have increased the usage of laser and inkjet printers compared to dot matrix printers. We have 15 laser and 10 inkjet printers in our organisation. Since we require good quality printing we use laser printers.”

With the market continuing to be stimulated both by falling prices and improved technology, it looks inevitable that lasers will soon become as commonplace and as indispensable as the photocopier.

Vikram Singh Negi, Country Product Manager, MFDs, Samsung India says, “In the case of inkjet printers, the driving factor is the lower cost of acquisition. With prices of laser printers coming down by 18 percent, the cost of acquisition of laser printers too has come down. Furthermore, better quality, lower maintenance and ownership costs are the factors that are driving the growth of lasers.”

Som Gangopadhyay, Marketing Head, Office Systems and Solutions, Canon India says, “The running cost of laser printers as compared to other printers are low which small businesses consider before making a purchase. Lasers enabled with advanced technologies like camera ready printing have shown tremendous growth. The small business segment contributes 18-20 percent to Canon India’s revenues.” He further added that Canon has identified ITeS and exporters as the main verticals within small businesses where it would be focussing the most.

Natesh Mani, Executive Director, New Office Group, Xerox India, comments, “Laser printers are best suited for office correspondence enabled by word processors, spreadsheets and power point presentations to create, invoices, statements and proposals. Due to increase in productivity, it is suitable for small business houses wherein the repetitive cost of purchasing cartridges is completely avoided.”

Colour rules over B&W

Cost is no longer a barrier to colour adoption. The preference for colour printers over black and white is gaining momentum. Organisations from the textile and education sectors prefer colour printouts. 72 percent of small organisations across India are using colour printers.

The colour market is one of the biggest areas of growth in the office automation industry. The usage of colour for maximising communication impact has now been observed as an emerging trend. This has been fuelled by technologies which have reduced equipment and running costs significantly.

Sunil Rai, Joint Director, S P Jain Institute of Management and Research, comments, “We fire 1,200 printouts per day and most are in colour. The adoption rates of colour printers are increasing due to a reduction in prices of these printers. For assignments, colour lasers are the best bet. Until recently, quality colour documents for our business requirements were outsourced to the graphics industry namely, printers, designers, desktop publishers and advertising agencies.”

Business communications increasingly need to be in colour. Today, there’s much value in having the ability to produce colour documents onsite and on demand.

There are an increasing number of devices, which employ technologies to deliver colour output to businesses, and there is an awareness amongst organisations that colour can bring benefits to their businesses. The factor that will drive the adoption of colour printers is a p rice drop across the entire range. Businesses also have a latent need for colour printing and would look strategically at what benefits colour could provide. Vendors would continue to introduce products that will offer better print speeds, quality and consistency of print, which would enable a number of businesses to print many of their colour documents in-house.

To begin with, marketing and sales would drive the use of colour in offices. The phenomenon is likely to spread to other groups gradually. However there are a few challenges that both the printer vendors and end-users have to overcome. These are increased costs which includes a one-time as well as recurring costs, cost allocation between various departments and colour printing through networked devices.

Emergence of MFDs

Though MFDs have carved a niche in the printing segment, vendors would have to take new initiatives to make it popular among small business houses. 33 percent of the small textile entrepreneurs are using MFDs, says the survey. In MFDs, vendors like HP, Canon and Xerox have almost the same market share as far as the small enterprise segment is concerned. S P Jain Institute of Management and Research does not have any MFDs. Rai comments, “Though we have 42 printers and two scanners, we haven’t yet explored MFDs. And if the need arises we will purchase more based on usage and requirements.”

From a practical standpoint, companies have made a sizeable investment in their network infrastructure and in e-mail as a core communications system. They seek equipment solutions that exploit these technical capabilities and deliver a higher return on investment (RoI). As per the survey, education and textile sectors are the major users of MFDs.

On initiatives taken by companies to increase adoption of MFDs in small businesses, Negi opines, “As 70 percent of Samsung’s revenues comes from small businesses we have given maximum focus to this segment. Our strategy is to focus on making available a complete product portfolio with an array of MFDs. We are concentrating on entry level printers through consumer programmes by promoting our image as an innovator. We will also build a strong printer brand image in channels and be the frontrunner in providing value to the customer by being the lowest in TCO.”

The MFD market in India has been witnessing growth triggered by the adoption of MFDs in small businesses. It is clear that MFDs will witness steep growth in the coming years. Mani informs, “MFDs can perform a mix of functions that include copying, scanning, faxing, printing, sending e-mail and faxing over the Internet, all at the same time. Some of the newer, smarter versions also offer innovative features like virtual mailboxes, remote delivery and scan-n-mail. With growing acceptance and user familiarisation, MFDs have begun to emerge as the ‘communication hub’ for networked offices.”

The advantages that MFDs possess include their compactness, single point solutions, easy to use network connectivity and price. MFDs cost much less than the sum of the prices of the standalone machines. Moreover, people also need to factor in their future needs. MFDs form the backbone of office communications today. They are ideal for the complex needs of corporations still straddling both the paper and digital information cultures.

Says Gangopadhyay, “By merging printing, copying, faxing and scanning functions into one seamless, desktop-controlled network operation, MFDs bring new efficiencies and economies to enterprise communications.”

TCO and aesthetics favour LCD displays

Upgraded technology, attractive schemes coupled with low prices and better picture quality introduced by vendors have led to higher demand for Liquid Crystal Displays (LCDs).

R Manikandan, GM, IT Sales, LGEIL says, “We at LG have always believed that the LCD market is here to stay and the growth in this segment is yet to happen. We believe that the next two years are going to be crucial.”

LCD monitors are gaining ground in the country due to a variety of reasons. The obvious and the most striking would be the aesthetics and the space occupied. The other reasons include health and safety benefits. The fall in price of LCD monitors over the past few years has also fuelled this growth.

"Small businesses and SOHO will contribute 10 percent to our LCD sales this year. The growth is linked to lower price points" - Rajeev Singh Volume Business Head, IT Samsung India

LCD technology offers better TCO due to savings on power consumption, air-conditioning and a bigger screen size when compared to a CRT of the same size. Rajeev Singh, Volume Business Head, IT, Samsung India says, “Last year, the small business and the home segment contributed around 3-4 percent of our LCD sales. This year, we expect the contribution to be at 10 percent. The growing adoption is linked to lower price points for LCDs in the market this year.”

While big businesses are more inclined towards LCDs, small businesses are also opting for the slimmer visual displays. Typical buyers are BPOs, the finance sector, hotels and hospitals.

Brands matter

Most small businesses are opting for brands, which give them value for money. Some companies say that they are ready to invest more if they perceive that a vendor can offer them superior service and support. For example, in the dot matrix printer category, most respondents said that service and support was a crucial factor while choosing a brand.

Sonakya says, “The price of the product along with lower TCO, right product, technology, service and support are the major factors that influence printer purchase decisions.”

TVS-E and Epson are the brands with the highest recall in the dot matrix segment, while in the inkjet and laser category, vendors such as HP, Canon, Xerox and Samsung have good brand recall. These brands are being preferred since there are negligible complaints on the service front. All vendors agree that providing good service is crucial to gaining brand recall among small businesses. Says Singh, “Samsung is introducing a wide range of products for the burgeoning small business houses along with attractive marketing strategies.”

Almost all the major vendors are investing in increasing the number of channel partners to provide better service. Even small businesses realise the need for a better image as it ultimately helps these companies in enhancing their bottomline. Imaging is playing a big part and will continue to do so for firms involved in providing services.

Gangopadhyay, while explaining the initiatives of Canon to make its brand name popular says, “Canon is looking at a three-pronged strategy—it has earmarked a marketing budget for this segment, direct marketing is also on the cards and it will expand its dealer base from the present 124 partners across the country.”

Upcoming trends

There is interest in wireless printing. The major wireless printing environments are infrared, Bluetooth and Wi-Fi. While no one technology has emerged as the dominant market leader, each has a strong support base in terms of technology enhancement as well as product availability.

The market continues to be stimulated by falling prices and improved technology. Negi says, “The market for A4 size colour laser is expected to grow five times in 2006 driven by falling prices, which will bring colour lasers within the Rs 15,000 price band by the second half of 2006.” The printer market including laser (mono and colour) and MFDs, which was around 400,000 units last year, is expected to grow by around 25-30 percent this year. MFDs are certainly growing in popularity. It is emerging as the most sought after mainstream printing device.

Security is an upcoming trend in printing in the enterprise space. Says Gangopadhyay, “Canon’s flagship product, imageRUNNER series, offers various print security capabilities like enabling or disabling protocols, print job accounting, secure print and mailbox printing. Canon’s security solutions offer features like data overwrite protection and secure print options. Secure print ensures that once sent to the device, only the authorised user can print the confidential document.”

Three-dimensional printing might also grow. It’s a concept that allows you to scan a solid object, make a mould of it and create 3D copies. It is called 3D printing. Three-dimensional printers are valuable tools for making prototypes of newly designed products. They deposit layers made from droplets of smart polymers, which gradually build up into 3D shapes. There is a low penetration of scanners in the small businesses. Manufacturers have to take a number of initiatives to increase the adoption of scanners. But we have to wait to see the adoption of these technologies in small businesses in India.