Copiers, printers and cars
March 25, 2009 by Steve HannafordPosted in: Special Report
The current situation of the office imaging industry (printers, copiers and multifunctionals) is not unlike that of the auto industry.
Sales are way down, thanks to the money crunch. Many companies, just like many consumers, are trying to save money in any way they can. Just as many consumers are putting off the purchase of a new Silverado or Camry, offices are deciding that they can do without that new imageRUNNER or Color LaserJet.
Like the car companies, the copier/printer industry is continually churning out new models. But, with a few exceptions, most of them are only a little different from last year’s models.
And the steady improvement in manufacturing technology has made both cars and office devices far longer-lived. There was a time, not long ago, when after five years on the road, a car would be a junker, a rustbucket. Likewise a copier or printer after a few years of hard use would be a nightmare of paper jams, toner streaks and service calls. But in both industries, steadily improved quality has meant that customers can hold on longer before getting a replacement.
These trends were already there, but the suddenness and depth of the current recession have made things worse for the vendors. Drivers who fear losing their job are not in a car-buying mood; companies that lay off hundreds, even thousands of workers, are cutting back capital equipment investments as well.
But in one way the office equipment makers have a big advantage over the automakers. Toyota and General Motors don’t own any oil wells or refineries, but Canon and Xerox and the rest make and sell their own ink and toner. What has kept the industry going has been sales of consumables, which are far more profitable than selling the machines. And HP is just as happy to sell toner to a six-yer old printer as to a new one.
One other parallel: mileage. While the 2008 gas price crisis is over, the shock has started to convince some people that better mileage is a big concern (as we see in the decline in SUV sales). Hybrid and electric cars, along with improved engine technology, are still a minor fraction of the auto industry, but even the manufacturers see that’s where the future lies. In the printer/copier industry, “mileage” is a matter of cost per page. New technologies, especially on the ink side, are bringing down cost per page, but as a recent survey we did shows, that’s still not a big motivator for most buyers. It will take time, but I believe such “low-miles-per-gallon” technologies are going to become the #1 sales driver in our industry as well.
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