Laser Printers: de facto Printing Machines in Office Space

Believe it or not, almost all the inkjet-based printers are moving out of the business space. This vacuum is being filled up by the laser-based printers. Though it appears to be a strong statement, but it is apparently true. One can refer to the industry reports and find out the truth. As per MAIT IMRB report, in 2005-06 laser printers have grown 128 per cent in terms of volume and 94 per cent in terms of value, whereas inkjet has grown 13 per cent in terms of volume and 8 per cent in terms of value. Even the first-time buyers in the SMB space, who were going for inkjet technology, are preferring laser printers today. The obvious reason for the booming of laser printers is the southward movement of laser technology price and speed over the inkjet. Today, a customer can get a 16 ppm printer for below Rs.7,000, and a 20 ppm printer for below Rs.20,000. This market is so interesting that players like Dell and Epson have entered this space. However, the players like HP, Canon, Samsung, Xerox, Lexmark, Brother, Ricoh and Sharp continue to be strong in this segment.There are various trends catching up in this space. On the one side, colour printing is increasing. On the other side, security integration is happening with the printers so that it becomes more personal and secured. And, MFPs are gaining popularity. In terms of the market trend, a high level of awareness about the benefits of in-house printing is being witnessed amongst large enterprises. The trend is slowly gaining acceptance in the SMB and SOHO segments.

Agrees Samir Shah, Country Manager, Shared Printing and Connectivity, HP India, “In the printer industry, a drastic shift towards the use of colour printing in the laser space is observed in the FY 2005-2006. This shift can be attributed to the increasing awareness among organizations that colour can bring great benefits to their businesses. Increased affordability as also the introduction of colour access control in colour MFPs which allows cost control has resulted in increased adoption of these devices.”

On the other hand, Dhiren Singh, Assistant, Director – Marketing (Consumer Imaging), Canon India, says, “The market for laser printers is definitely growing at a very rapid pace. The growth is primarily driven by the mono laser segment. The market size for laser printers in 2005 was 3.4 lakh units, which is expected to be 3.9 lakh units in 2006.The mono laser segment is expected to grow at a CAGR of 4 per cent between 2005 and 2010. As per IDC, colour laser printers are expected to witness significant growth in the period 2006–2010. Growth in the SMB segment is continually increasing demand for mono and colour laser printers.”

Compared to other players, Epson is fairly new to this business in India. Prabagaran, Business Manager – Laser Printers at Epson, says, “There are three factors driving this growth, i.e. increasingly affordable price, better and improved technology and increasing print volume and needs.”

Samir adds, “One of the most significant factors operating in favour of MFDs is the advantage that these devices have over standalone devices in terms of a corresponding cost and feature ratio. A comparative analysis of the two throws adequate light on how MFDs are turning out to be cost-effective propositions, especially in the small and medium enterprises (SMEs) and small office/home office (SOHO) segment, where most growth is expected. And, with corporates resorting to cost saving in communications in an increasingly competitive environment the thrust on MFDs is certainly present there too.”

Another key driver has been a downward trend in the MFD prices in the last two years. Operating costs of MFDs, which used to be 50 per cent more than that of analogue copiers, have now come down to levels which are the same as, and in some cases even less than that of comparable analogue copiers. These, plus the fact that there are increasing functionalities and feature options in MFDs, which enable customers to get higher productivity, has driven the market in the last one year. MFPs are able to seamlessly integrate with the document management software in the office environment.

Giving his perspective, Dhiren adds, “Major factors driving the growth are for various reasons. For example, SMBs switching from DMP to Laser, increasing propensity to spend by SMBs, better quality offered by the laser technology, downtrend in the laser printer prices.” The gap between the”acquisition cost of a mono laser and a colour laser printer is gradually reducing. Today, the cost of acquiring an entry-level colour laser printer would work out to a little more than upgrading mono laser printers.

Today, companies are very aggressive on retail initiatives. The buying behaviour of the Indian consumer has undergone a huge transformation, which calls for registering widespread retail presence of a company if it desires to target the mass market.

Dhiren maintains, “As the market continues to be stimulated by falling prices and improved technology, it seems inevitable that B&W laser and colour laser printers will soon become commonplace and indispensable.”

On the other hand, from the segment specific almost all the verticals are buying laser-based products aggressively. But the high growth industry verticals include BFSI, Installation/Communication/Entertainment, IT & ITES, Government, etc.

HP being the leader in this space commands 74-per cent market share (as per IDC). Samir says, “HP’s consistent success in the IPG space is a function of a strategy that ensures innovation in all the segments and markets, a nationwide reach that ensures product availability and post-sales service, a pricing that ensures affordability and greater technology penetration and simplicity that ensures ease of use and enhanced productivity, i.e. service provided by an HP printer is the key differentiator from its competitors.”

Canon being the aggressive players enjoys”5-per cent market share in the laser printer segment and the company aims at 10 per cent in 2006. However, Canon enjoys high brand equity and high loyalty; so also repeat customers. As per Canon’s new roadmap, its range of printers, which previously were largely driven in the market by traditional IT channels, will now get an equal display opportunity in the retail shop fronts. To pursue its retail strategy, Canon has already initiated 73 IT imaging zones, the multi-brand retail outlets for Canon printers. Apart from partner owned retail shops, Canon is also targeting big retail malls in the top metro towns to make its presence further felt in the retail market.

Canon has always been offering its customers the best of technology by constantly innovating and evolving its products. So, innovation of new technologies and educating the channel partners about them has been the key area of focus at Canon. Channel education becomes important in order to communicate better its technology to the consumers to push the sales of its products.

The industry is facing intense competition and thus Canon is very focussed on creating enhanced consumer values for its customers. Therefore, the company is engaged in designing and implementing multiple programmes to cater to the various consumer segments throughout the year, taking care to ensure that the benefits accrue to the end- consumer. With this objective in mind, Canon has recently conceived some web-based Consumer redemption programmes which have been very successful with the channel as well.

According to Dhiren, Canon has developed two channels – IT and corporate IT – to address the market. Corporate IT will focus on corporate requirements of large volume printing and bulk business. IT channel caters to resellers and retailers who are addressing the SOHO and SMB segments. Canon advantage and differentiato rs are being communicated to the market by way of ads and promotions so that the customer realizes the same. The company has undertaken ongoing training programmes to enhance the competency of our channel to communicate and convince the customers.

Canon also believes in buliding knowledge amongst their dealers through regular training programmes. An example of this is an education programme for its partners so that they can communicate better its technology to the consumers to push the sales of its printers. As a part of this, the company has recently initiated “Canon Gyan Yatra”, which is, as the name suggests, essentially a Knowledge Yatra for the channels. The Yatra has covered 17 cities in the South, Punjab and Delhi and will now move to the North-East and Western regions.

Epson does not seem to have much interest for the market share, but they have their internal projections. The company’s current market share will be in the region of two per cent and intends to grow this gradually and systematically. Towards achieving this, the company has chalked out various engagement programmes in place both at the channel level and at the consumer level. Regular meets, training programmes, incentive offers, etc. are a constant and ongoing process to engage and grow. Epson’s laser printer products revolve around EPL and ALC families, i.e Mono - EPL 6200L, EPL 6200, AL - 2600N, EPL 2500, EPL 3000 and for Colour - ALC 1100, ALC 1100N, ALC 2600N, ALC 3000N, ALC 4200DN and ALC 9100.

The company finds tier-2 & 3 cities are potentially big markets. Therefore, the company is much focussed on these places. Epson currently has about 250 resellers and the plan is to increase this to 400 by December this year. 

HP as the market leader has a strong focus on tier-2 & 3 cities. HP has consistently strengthened its consumer support and services infrastructure for its entry-level laser printers by setting up 300 exchange points across 130 cities. In addition, HP will be conducting channel training programmes across 60 cities in the next three months to touch the base with 2,000 resellers nationwide.

For Canon, the tier-2 and tier-3 cities are always the area of focus right from the beginning and the company has really benefited from this approach. Dhiren adds, “It has been a very effective route and a very effective strategy for a late entrant like us to take on the competitors.” The media costs are lower there, while brand loyalty in small towns is greater when compared to that in”the bigger cities. Also, smaller towns have a vacuum that exists for quality IT and consumer products and Canon aims to fill in this gap. The smaller cities are not just price conscious but also value conscious. In the laser market, the fastest growing cities are Chandigarh, Bangalore, Hyderabad and Jaipur. Dhiren maintains, “Canon is“strong even in the smaller towns like Pune, Baroda, Bhopal, Mysore and Udaipur. These cities are mainly located in the North West region where Canon has developed a good rapport with the channel.”

For Canon, these cities contribute 30–35 per cent of its business. Canon has a strong base of over 1,300 partners in these cities. Canon India has joined hands with AFL Logistics Pvt. Ltd. (Third-Party Logistics Service Provider) to support on integrated solution for warehousing and distribution.

Samsung is another big player in the laser printer space. They have proved this in the past 6–7 months. The company has launched huge promos to push its laser printers. The first came in January 2006. It was a buyback offer on ML-1610 printer, wherein the company offered Rs.1,500 for an old inkjet printer. Secondly, the company offered a free toner with its ML2010, SCX 4521F and SF 565P printer models.

Another big scheme came in the month of May 2006. It is one of the biggest ever schemes of Samsung, wherein the company offered customers free air travel, to and fro, to any destination of their choice. The scheme, called “Samsung Airways Offer”, was open to customers on buying select Samsung laser printers, ML-1610 & ML-2010, and Laser MFPs, SCX-4100 & SCX-4521F, and SCX-4720FN. The scheme was valid for a purchase made during the promotion period that was from May 1 to June 30, 2006. It was a web-based redemption programme where the customer had to register his/her details, along with the serial number of the model purchased, on www.samsungindia.com/airways, latest by July 5, 2006.

Similarly, Xerox has taken the competition very seriously as the company has launched a model in the monochrome category – Xerox Phaser 3117 at a breakthrough price of Rs.4,500 (excluding taxes). Targeted at entrepreneurs, small businesses and personal home users, the product has a speed of 17 ppm (letter) and 16 ppm (A4) and supports diverse and complex needs of document printing. It prints at a resolution quality of 600 dpi and has a 150 MHz processor with an 8-MB memory. The company has a multipurpose tray that holds up to 150 sheets to keep the sheets moving. In this very month also, the company announced to introduce new channel-centric activities, including training and awareness programmes for its channel partners to make their business profitable. In the month of June 2006, the company had launched a “Buy-Back” scheme for its latest digital solution portfolio, Xerox 6204. The scheme was targeted at the Xerox channel partners. The scheme offered Xerox channel partners the opportunity to replace their existing analogue copier or an inkjet printer to a digital wide format solution.