SMBs for the standalone

With innovative marketing strategies and reduced prices, standalone printers have wooed the SMB segment, says Kusum Makhija

IDC believes that adoption of colour printing in the laser space will take off this year. While 2006 will witness an increased adoption of colour laser printers in offices, the installed base will keep on increasing thereafter. Over the past two years there has been a concerted drive by the industry to develop and enhance the range of colour laser devices that they offer. This drive will begin to see results in 2006. The CAGR for the next five years is predicted to be about 40 percent, while 2006 is likely to witness an increase of about 50 percent over 2005 shipments.

There are an increasing number of devices which employ technologies that deliver colour output to businesses, and there is an increasing awareness among organisations that colour can bring great benefits to their businesses. But the question of cost usually arises when colour is mentioned, and is often a deterring factor when an organisation contemplates widespread deployment of colour devices. Colour has traditionally been limited only to inkjet devices. However, that results in poor print quality coupled with high costs of maintenance and consumables. As a result, organisations are looking towards laser technology for meeting their colour printing needs.

Growth factors

"Product innovation and attractive consumer schemes are definitely fuelling the printer market. Attractive buy-back offers, replacement offers for old inkjet printers, and free cartridges with the printers are increasing sales" -Anil Chandana Country Product Manager LBP Samsung India

Peripheral prices are expected to drop considerably across all products. Businesses have a latent need for colour printing, and would really begin to look strategically at what benefits colour could provide. Vendors are introducing products that will offer better print speeds, quality and consistency of print, which would enable a number of businesses to print their colour documents in-house.

“Affordability is one factor that is driving penetration for this category in the SOHO segment. Today, a customer can get a 16 ppm printer for below Rs 7,000, and a 20 ppm printer for below Rs 20,000. Another trend is the growing popularity of the colour printer. We expect this segment to show a growth of around 20-25 percent this year,” says Anil Chandana, Country Product Manager, LBP, Samsung India.

To begin with, marketing and sales would drive the use of colour in offices. This is likely to gradually spread to other groups. IDC expects a few organisations to act as innovators in adopting colour printing cost-effectively, thereby overcoming the above hurdles. These organisations will gain an early advantage over their competitors, and this would then lead to widespread adoption of colour in Indian offices.

The channel in the standalone printing device market continues to play a major role since these products are highly channel driven. As a result, vendors are looking at bundling and buy-back offers to attract customers. “Product innovation and attractive consumer schemes are definitely fuelling the printer market. Attractive buy-back offers, replacement offers for old inkjet printers, and free cartridges with the printers are increasing sales especially in the low-end product category driven through the reseller channel,” states Chandana.

SMBs lead the pack

Print applications among small businesses vary from simple bill-printing in a showroom to multiple stationery printing for service providers. The small business printing and imaging market is growing at a steady pace. While dot matrix printers are preferred in high transaction environments, laser printers are preferred by organisations such as hotels and ad agencies.

Impact (dot matrix) printers are the preferred choice because of their rugged nature and low cost of printing, but inkjets and lasers are also gaining ground rapidly as the need for high print quality emerges among small businesses. This is mainly because the cost of printing on these devices has come down significantly over the last few years. Explains S Narendran, General Manager, Marketing, TVS Electronics, “Cost economics is still a very important factor in the small business segment. The cost per print drives the adoption of standalones in this market.”

Vendors such as TVS-E, Epson and WeP Peripherals are bullish on their growth in the small business segment. Inkjets and lasers are also gaining ground in segments where organisations have low printing volumes. Laser printers are being bought in organisations where superior print quality is required. Small enterprises are awakening to the fact that better imaging quality can be a competitive edge especially for companies providing services. Clients today ask for better quality and high-resolution pictures, and presentations are becoming the order of the day. Firms such as travel agents involved in providing services prefer laser printers because they can print good quality images of attractive tourist destinations for wooing the Indian traveller.

“Even small enterprises realise the need for a better images as it ultimately helps these companies in enhancing their bottom-line. Imaging is playing a huge part and will continue to do so for firms involved in providing services,” comments Som Gangopadhyay, Marketing Head, Office Systems and Solutions, Canon India. In small organisations, laser printers are also bought as personal printers for the top management. These are typically used to print presentations.

Says Nalini Jolly, National Operations Manager, Toshiba India, “Lasers and inkjets are growing in the small enterprise segment primarily because the total cost of ownership for these printers is low.”

Most small enterprises are going in 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. 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 enterprises.

Says Ashwini Aggarwal, Country Marketing Manager, Officejet printers, HP India, “Small enterprises are no different when it comes to selection of brands. Since there is negligible price difference between printers, service is going to be the only differentiator.” Almost all the major vendors are investing in increasing the number of channel partners to provide better service.

MFDs to catch up

Though MFDs have been well adopted among the enterprises, it has yet to take off among the SMBs. While vendors are positioning MFDs as a solution that can reduce total cost of ownership when it comes to printing, the product has been a tad slow to catch up among the small businesses. Price is clearly the problem. For example, most small organisations have an annual budget of Rs 30,000-40,000 for printing solutions. If an organisation wants to go in for MFDs, it has to stretch its budget by another Rs 20,000-30,000, which is unlikely. Moreover, most small enterprises feel that their printing requirements haven’t reached the stage where such an investment is justified.

Observes Jolly, “It will take another 3-4 years before small enterprises start adopting MFDs. Currently, these users still prefer dot matrix, laser and inkjet printers.” Jolly says that while sales of MFDs are picking up, it is still early days. Since most small enterprises cannot bear a higher initial cost of ownership, it means that MFD penetration is almost negligible among small enterprises.

Though a lot of SMBs have been eyeing the low-end MFDs, vendors need to work towards educating them on the benefits of MFDs. Says Gangopadhyay, “In the small enterprises segment, maturity levels are low and they do not expect exceptional growth. This is a stumbling block for them when it comes to owning an MFD.” He says that for Canon, the small business segment is a huge opportunity as the company is seeing exponential growth in the standalone laser printer market. “We have almost doubled our business in these categories, but I feel that laser MFDs are still in a nascent stage in the small enterprise. They are more likely to adopt this product as they move up the value chain.”

From inkjets to lasers

Penetration of laser printing technology has been significantly high over the last couple of years. The adoption of laser printers has seen an upsurge across all segments. However, the transition from inkjet to laser is not happening as fast as it should.

“There are several bottlenecks. Changing over from inkjets to lasers is not a smooth process. The perceived high price of the laser printer, which over a period has become affordable, has to a great extent hampered the spread of this technology. The logistics of buy-back of inkjets for lasers have also not been streamlined so far,” feels R Manikandan, GM, IT sales, LG India.

Perceived initial investment is a major bottleneck for driving the laser printer segment. The perception is that running cost is high. Inkjet printers are seeing demand in small enterprises primarily due to the pricing that starts as low as Rs 3,000. Comments Gangopadhyay, “Inkjets are popular among small enterprises. The penetration is also high as many PC vendors bundle an inkjet printer with their offerings.”

Says Aggarwal, “Inkjet is a very strong business segment, especially in the B&C class cities of India. The quality of print that inkjets provide is no less than any entry-level to mid-level laser printer—at a cost that is less than a laser printer. Besides, the maintenance cost on inkjets is significantly lower.”

But when it comes to enterprise colour applications, laser adoption seems high. Colour laser printers are being used for printing business documents across industry sectors. Colour printing is now affordable, and the ratio for colour to B&W printing is 1:4 as opposed to 1:20 some years ago. Laser printers have emerged as solutions that both vendors and partners can position as a must-have for corporate buyers. It is emerging as the most-sought-after mainstream printing device. 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 as commonplace and indispensable as the photocopier.

Feature-rich devices

In a bid to drive home the value-for-money concept, vendors are coming up with feature-rich devices. The standalone printer market being extremely competitive, product differentiation forms a key element of every vendor’s marketing strategy. Since attributes like the lower total cost of ownership, higher rate of ppm and lower rate of printing cost per page have become common with standalone devices, vendors are now positioning the enhanced features of the product in order to attract consumer attention.

“Our new range of laser printers provides sharp text and crisp graphics at 1200x600 dpi resolution for professional documents. Enhanced features like the toner save button—a one-touch configuration that allows the user to save up to 40 percent of toner while still producing high quality prints—find useful applications in the corporate segment with large business printing needs,” concludes Chandana.

kusum@expresscomputeronline.com