Weekend MFP Industry Notes Newsletter
8-2-09
Why did Hewlett Packard develop their LaserJet laser printers in Boise, Idaho and not Silicon Valley? In his new memoir, retired HP executive, Ray Smelek, states that one of the reasons he decided to choose Boise was Idaho’s legal driving age. In 1973, when he was researching cities, he found out that Idaho’s legal driving age was only 14, which was very appealing to his kids, who were 7, 10, 12 & 14 at the time.
HP announced it won “Pick of the Year” awards from Buyers Labs Inc.:
- OffficeJet Pro 8000 color inkjet printer
- OfficeJet Pro 8500 color inkjet printer
HP was recently the target of protestors from Greenpeace. The protestors apparently breached security, scaled the walls of HP’s roof and vandalized property. On the HP roof it stated “Hazardous Products”. Greenpeace stated that the reason for the protest was “Earlier this year, HP postponed its 2007 commitment to phase out dangerous substances such as brominated flame retardants and polyvinyl chloride plastic from its computer products?
According to MAIT’s Performance Review, unit sales of computer printers and MFPs, are up 1% over last year worldwide.
Nuance Communications purchased X-Solutions of the Netherlands. Details:
- Xerox was the catalyst in the formation of both companies
- History of Nuance:
- Xerox purchases Kurzweil Computer Products, an early developer of OCR technology, in 1980
- In 1988, Xerox acquired scanner make, Datacopy
- Xerox combines Kurzweil and Datacopy to Form Xerox Imaging Systems (XIS)
- In 1998, XIS sold to Visioneer
- Visioneer renames itself ScanSoft
- In 2000, ScanSoft purchased Caere, maker of OmniPage OCR
- ScanSoft dumps its TextBridge OCR engine for OmniPage
- In 2005, ScanSoft merges with Nuance Communications
- In 2006, it paid $357 million for Dictaphone
- In January, 2008, it filed a patent infringement lawsuit against ABBYY, maker of FineReader OCR engine. It also sued ABBYY’s largest customer, Lexmark.
- In September 2008, it filed a patent infringement lawsuit against eCopy
- In October 2008, IRIS, who OCR engine is part of eCopy, filed a suit of its own against Nuance.
- Nuance claims to have 70% marketshare of OCR software in the U.S.
- X-Solutions is the maker of ScanFlowStore, an OCR scan embedded application sold with Xerox MFPs.
- Also makes DigiDocFlow for Ricoh, SmartOfficeScan for HP and SimplifyScan for Sharp
Kofax, maker of high end production scanning systems and software, announced it is going downmarket. Its new Kofax Desktop, can be downloaded from their website for only $29. The company hopes to compete against eCopy Desktop or Nuance PaperPort with this new product. It adds a scan tab to MS Office, and works with any TWAIN scanning device, but only offers pull scanning, and not push scanning.
Oce’ has renegotiated its debt covenants, as the company struggles financially, to prevent the banks from taking over company. The new covenants now call for:
- a net debt to EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio of under 3.5
- an EDITDA to net interest ratio of over 3.5
- the banks charged Oce’ 12 million Euros for this covenant restatement
The City of New York just signed a 3 year, $1 million contract to supply typewriters to the New York City Police Department, according to CIO magazine.
A worker for the State of California reported that budget cuts are so deep, that his department, the Osteopathic Medical Board in Sacramento, is being prevented from buying toner cartridges for its Kyocera KM-3035 digital copier.
Dell Computer agreed to pay out $9.1 million to settle a class action alleging that the company discriminated against women in its methods of compensating and promoting its employees.
Samsung’s North American headquarters won a temporary restraining order against its former chief managing officer in a suit alleging that his accepting the same position at rival Motorola Inc. will illegally pass to Motorola, some of Samsung intellectual property.
Samsung owner and former group chairman, Lee Kun-hee, has been cleared of all legal charges, with the exception of tax evasion, by Korea’s Supreme County after a 13 year court battle. Lee led Samsung for 20 years before quitting after being indicted on charges in April of 2008.
InfoTrends expects desktop scanner sales to increase by 2013, even though sales this year are down as compared to a year ago.
Lexmark reported its last quarter’s financials:
- earnings down 80%
- stock shares fell $1.27 to $17.50
- profit down to $17 million from $83.7 million a year earlier
Police in Utica, NY have arrested Ngoc Nguyen on July 16th, after he allegedly destroyed a copier at an office at 901 Park Avenue.
Microsoft Corp. announced it had purchased Yahoo Corp. The company will incorporate this search engine technology into its Bing! Search division. It hopes to now be able to compete against Google Corp.
According to the Printing Industries of America, digital print accounts for 12% of printers’ shipments, or about $36.7 billion. By 2020, the growth in digital print could add $13-$20 billion.
Industry analyst, Gartner, predicts that printer/MFP manufacturers will lose more than $13 billion in revenue to companies that make unauthorized generic toner and ink cartridges, due to the rising popularity of managed print services programs.
Interesting statistics from U.S. Postal Service:
- 86% of domestic mail is generated by business
- 14% of mail is from households
- In 1995, 20% of world communications was mail
- 99% of companies worldwide use email
- 86% of companies have a website
- 78% of companies have an intranet
- 72% of companies plan to process transactions over the Internet
- 45% of all print is distributed via the Postal Service
One of Xerox’s subcontractors also suffers financially. Flextronics Corp., headquartered in Singapore, announced it last quarter’s financials:
- Loss of $154 million
- Last year made a profit of $130 million
- Revenue fell 31%
- Company has plant in Aguascalientes, Mexico that makes the Microsoft Xbox,
and refurbishes Xerox copiers
Xerox was the target of protestors. Members of Greenpeace marched in front of Xerox’s office in downtown Montreal, complaining that the company buys and sells paper that come from trees in Canada.
Xerox lost its legal dispute with the state of Wisconsin. Xerox was claiming that the $8.3 million in copiers it leased to City of Milwaukee and City of La Crosse was exempt from property tax.
Xerox announced it has hired Kari Byron, Grant Imahara & Tory Belleci of the MythBusters Build Team show on Discovery Channel to give presentations in its booth at the upcoming Print 09 trade show in Chicago in September.
A local dealer is protesting a bid won by Xerox. Gary Mahn, owner of Fisher’s Document Systems, claims that the Meridian Public School District, is wasting $680,000 over 5 years by choosing Xerox over his bid. Mr. Mahn’s bid was for $32,417 per month, while Xerox’s was $43,758 per month. The contract is for 60 months.
Xerox’s executive, Tom Salierno, announced that David Scholle has been hired as President of its Minnesota Global division. Global’s presence in Minnesota apparently was created by the consolidating the MIF of its Xerox agents in the area.
Canon’s factory direct branch in San Francisco, formerly a dealer named NewCal, will now be the official office equipment provider for San Francisco Giants baseball team.
Canon announced it received two “Pick of the Year” awards from Buyers Laboratory Inc. for the following products:
- imagePROGRAF iPF755 wide format color inkjet printer
- imageRUNNER 5050N digital b/w MFP
- color imageCLASS MF8450C
- imageFORMULA ScanFront 220eP
Canon convinced U.S. Senator, Check Schumer, to help lobby State of New York government to financially assist Canon build its proposed new north American headquarters:
- The huge new building is planned to be built on the former Tilles Pumpkin Farm in Melville
- Current building is in Lake Success
- “I believe that there is no recovery act candidate more deserving that this one” said Senator Schumer.
- Canon is pushing for the State of New York to reallocate transportation stimulus money it received from the federal government to upgrade and widen Route 110 service roads,
which lead to the property.
- Expected cost to taxpayers is $6 million
Canon reported its last quarter’s financials:
- Net profits down 86% from 107.8 billion yen to 15.6 billion yen ($164 million)
- Will cut 220 billion yen in costs, an increase of 28% of original target
- Predicts at end of fiscal, its profit will be down 62%
- Assumes that dollar/yen exchange of only 95 yen to the dollar
- Stated that the rise in the value of the yen versus the U.S. dollar has cost the
company 151 billion in revenue
- Expects it sales of laser engines to Hewlett Packard (all HP LaserJet products are
actually relabeled Canon’s) will fall 45%
- Copier supply revenue fell nearly 30%
- Total revenue down 28%
- plans on opening up 1,000 factory direct branches in China within 2 years
Canon announced new optional software that can be embedded in MEAP equipped Canon laser MFPs. The new software; “Security & Cost Control Pack”, provides an affordable secure job tracking and cost recovery solution.
Kodak reported its last quarter’s financials:
- sales down 29%
- reported a loss of $191 million
- revenue from digital business down 28%
- gross profit was 18.5% of sales, a decline from 23.6% a year ago
- SG&A expenses were down 26%
- R&D expenses down 38%
- Current debt is $1.311 billion
- Graphic Communications Group sales were down 24% (this is division that makes controllers and product print systems)
Pitney Bowes reported its last quarter’s financials:
- revenue was $1.38 billion compared with $1.59 billion a year ago
- reduced its debt by $179 million
- U.S. Mailing revenue declined 8%
- Equipment sales declined 7%
- Software revenue declined 12%
EFI announced results of its last quarter’s financials:
- revenues were $90 million compared with $186 million a year ago
- a net loss of $13.3 million
- CEO, Guy Gecht, stated “main disappointment for the quarter was the delay in shipping the Vutek GS3200” (this is a $600,000 high speed wide format color inkjet system)
- Reduced operating expenses by 22%
EFI announced it had won its legal battle against Zurich American Insurance Co. and Old Republic Insurance Corp. The two companies claimed that they were not obligated to cover a $19 million settlement in a shareholder derivative class action
PrintWeek magazine reports that Heidelberg and Manroland are considering a merger. Both are large offset press makers, who are suffering due to the slow economy. However, the German government may not approve this supposed merger, due to antitrust concerns.
Lexmark launched a new option for some of its printers, which will allow the devices to print on RFID material. Radio Frequency Identification (RFID) Ultra High Frequency (UHF) technology is used in tags that allow companies to track their assets. RFID tags can be placed into a special $2499 drawer option, so that the Lexmark printer can print an ID number on the tag.
In his memoir, Bob Metcalfe, inventor of Ethernet networking, gave some history on how he first tried marketing his new product:
- DEC said; “Yes, but we’re gonna have to be sure that you know how to build stuff because we wouldn’t want to buy junk. We’re a serious computer maker. We need to check all your
manufacturing processes”
- IBM said; “Get the hell out of here. We’re not doing business with you. We think Ethernet is junk. We’re gonna do the token ring. We were selling millions of Ethernet cards to buyers of IBM PCs without IBM’s permission.” (IBM eventually discontinued Token Ring in favor of Ethernet)
- Apple ordered 300 units, but required that they be external boxes made with lots of metal. “I believe that all 300 of them are out there in the San Francisco Bay right now, serving as boat anchors,
holding yachts in place”
Kyocera announced a connector to allow its MFPs to work with CutCom’s SentryFile document management software.
Kyocera announced that it would relabel a product from Ricoh. The new Kyocera FS-C1020MFP, a desktop color laser MFP, is actually the Ricoh Aficio SP C232SF. (since it is made by Ricoh, it uses organic drum, and not Kyocera’s amorphous ceramic silicon drum)
Kyocera now shipping its new color laser MFPs, the TASKalfa 750C, 650C & 550C offering:
- 750C offers 75ppm b/w & 65ppm color
- 650C offers 65ppm b/w & color
- 550C offers 55pm b/w & color
- All three are actually relabeled Toshiba color laser MFPs (and therefore do not use Kyocera’s amorphous ceramic silicon long life drums, but instead use organic drums which Kyocera normally says is inferior technology)
- product marketing manager for the new products is Danielle Wolowitz
- all come with 10.4” touch screen color LCD display
- optional EFI Fiery print controller (this is unusual, as in the past Kyocera did not offer Fiery)
- Standard built-in print controller (Peerless technology), has 80GB hard drive, and 1.2GHz processor
- 100 sheet document feeder
Toshiba launched a new promotion, called “Back in Black” Details:
- runs from 8/1/09 to 10/31/09
- companies who lease a new Toshiba color copier, using Toshiba Financial Services lease, are eligible to receive up to one free year of b/w copies (service and supplies)
- customer must lease either a eSTUDIO 2830C, 3530C, 4520C, 5520C, 6520C or 6530C
- if customer chooses a b/w MFP, then they only receive a maximum of 6 months of b/w copies, and can choose from eSTUDIO 305, 455, 555, 655, 755 or 855 models
- available from factory direct branch or authorized dealers
- in all cases, customers free b/w copies expire at either a time period, or a set amount of copies, whichever comes first
Toshiba Corp. invests more money into nuclear power technology. The company announced that it has acquired CS Innovations LLC of Arizona., which owns digital nuclear plant safety control systems, and had annual sales of $2 million. (more evidence that Toshiba’ new CEO, who is a nuclear engineer, is steering the company away from electronics, including digital copiers)
Toshiba announced it will open a factory direct branch in Littleton, Colorado. It has leased 16,000 square foot office neat intersection of I25 & I75 freeways. The office has 50 employees with $12 million in annual revenue. (Toshiba entered the metro Denver market when it purchased Copy Concepts Inc. in 1984)
Toshiba’s new MFPs, featuring the eBridge print controller, allow for embedded software applications. However, Toshiba announced it will charge $750 to enable full software platform functionality per device.
Toshiba Corp. announced that it hopes to earn a $1.1 billion profit by March of 2010.
- for last quarter, the company reported a loss of $610.4 million
- this is fifth quarter that company reported a loss
- projects a loss for the calendar year
- will save more than 300 billion yen this year through job cuts
- plan is to let go of 3,900 workers by end of fiscal year
- total revenue fell 17%
- received a $500 million prepayment from Apple Computer for flash memory chips to its iPhone.
A company that sells generic toner and ink, announced that it has created a free website for end users to solve their printer problems. PrintCountry.com launched a new site on YouTube with videos showing printer users how to solve common print driver issues, which they hope will drive more traffic to their consumables website.
Sharp reported details on its past financial quarter’s performance:
- reported a 20% drop in sales, down to $6.32 billion
- reported a loss of $266 million, as compared to a profit of $262 million a year ago
- Office technology sales down 14%
- announced a joint venture with Sony to sell large sized color LCDs
Sharp launched the FO-2080 desktop A4 b/w system featuring:
- 20ppm top speed
- Copy/fax/print/scan
- Two paper drawers
- Letter/legal size only
- 50 sheet bypass
- Auto duplex standard
- Button Manager is a built-in utility which offers scan to OCR
Ricoh announced that its DocumentMall off-site document management solution is managed by Savvis, Inc., and meets Statement of Auditing Standards No. 70 (SAS 70) Type II requirements. SAS 70 meets requirements of Section 404 of the Sarbanes-Oxley Act (SOX) for internal controls by public companies.
Ricoh announced it will resell OmTool’s AccuRoute Capture document management software, as an option for its models that offer embedded software options.
In an interview with Barron’s magazine, Ricoh’s CEO, Shiro Kondo, gave out following details:
- total global copier market is $28 billion per year
- “The current business environment has been challenging to say the least”
- Sales down 6% to $21 billion worldwide
- Operating profits plummeted nearly 60Z%
- Earnings per share fell
- Stock dropped from $111 to $63
- Generates half its revenue from software and services
- 55% of sales come from outside Japan
- In 2001, purchased Lanier
- In 2006, purchase DANKA Europe
- In 2007, purchased printer division of IBM, called InfoPrint
- InfoPrint division has yet to turn a profit
- by 2012, analysts expect it could add 100 billion yen in revenue
- In 2008, purchased IKON, which also has yet to turn a profit
- Expects IKON to deliver 280 billion yen in revenue
- Expects total company revenue to grow 3.3% this year and 10% next year
- “You may find these targets a little too aggressive, but we are determined to do our
best to achieve these goals”
- Ricoh released the MSRPs for its new b/w production print systems, the Pro 907EX, Pro 1107EX & 1357EX
- Pro 907EX mainframe = $40,000
- Pro 1107EX mainframe = $51,000
- Pro 1357EX mainframe = $62,000
- Letter size LCT = $3000
- Tabloid size LCT = $4850
- Bypass tray = $1400
- Cover inserter = $3500
- Multi folding unit = $9150
- Stacker unit = $15,750
- Stapling finisher = $5830
- Hole punch unit = $920
- Booklet finisher = $11,800
- Trimmer unit = $12,400
- Print controller = $3300
- PostScript print driver = $1900
- Ring binder unit = $24,825
- Perfect binder = $44,830
- GBC punch unit = $8995
- GBC die set = $475
- Spencer Labs announced results of testing of several office color MFPs. Comments made include:
- “the Ricoh Aficio C5000 exhibited the most differences in print quality on different media types, with
color toner splatter causing loss of edge sharpness on standard office plain paper and economy media as well as generally lighter rendition of high grade and recycled media”
- “Ricoh C5000…edge sharpness of secondary colors was poor and coarse screening detracted from overall color print quality”
- “”output exhibited some toner splatter, expecially on secondary color,
making text & lines appear blurred”
- “color text & lines were rendered with poor quality, exhibiting distracting coarse screening patterns with tertiary color text appearing very jagged.”
- “toner splatter was noticeable, causing the color text & lines to look blurred, especially on secondary colors”
- “tints and blends were rendered least well as they exhibited coarse, distracting screening that detracted from overall quality”
- “images exhibited good sharpness, but coarse screening detracted from overall image quality”
- “images exhibited a slight yellow cast”
- “Canon imageRUNNER C5180 output had very smooth screening, although text & lines appeared
comparatively thicker with soft edges limiting sharpness”
- “tints & blends exhibited mottling on the standard office, economy and recycled media output”
- “images on high grade paper exhibited a magenta cast and some banding was noticeable on solid image areas”
- “misregistration was noticed on tertiary color text such as brown”
- images were rendered with excessive contrast”
- “highlights were blown out and shadows were plugged, losing some highlight
and shadow details”
- “images appeared comparatively dull”
- “Xerox ColorQube….some random jaggedness was noticeable on both high resolution/photo and enhanced mode black text”
- “black text in standard mode…comparatively lower quality and density”
- “individual black dots were visible….white unfilled spaces were noticeable…….making text appear gray”
- “in fast color mode, black text was fuzzy and grainy”
- “on all 4 output modes, reverse black text was rendered with unsharp edges, random fill-ins were noticeable”
- “radial black lines exhibited jaggedness on all
- “angled and curved black lines were jagged and broken and appeared uneven”
- “color lines were not razor sharp and exhibited soft edges”
- “curved fine color lines were slightly uneven”
- “even straight color lines appeared jagged and blurred”
- “on standard and fast color mode, solid blacks appeard noisy with visible streaking”
- “machine streaking was noticeable in standard and fast color mode through solid color areas”
- “grays were rendered as four-color grays on all modes” (meaning unit will use lots of color wax to create grays or halftones, instead of using just black toner like a
typical color laser MFP)
- “standard and fast color mode output appeared grainy with noticeable streaking”
- “solid image areas appeared slightly grainy on high resolution/photo and enhanced mode”
- “lack of image details in standard and fast color modes was noticeable”
- “both standard and fast color mode image output was lower quality with visible streaks in dark image areas”
- “high resolution/photo mode images were slightly yellow”
- “standard mode images appeared to have a slight magenta cast”
- “blue blends appeared to shift towards purple and showed some harsh transitions”
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