Science aside, the dealer channel will decide which technology clicks more pages.
Xerography may be seasoned, yet the 79-year-old technology invented by physicist Chester Carlson still works remarkably well. His photocopying process uses an electrically charged, photoconductor-coated metal plate and dry powder, also known as toner. Even more recent, 20th century liquid toner advancements are considered mature.
R&D investments have shifted to inkjet, according to Elizabeth Gooding, founding partner of Inkjet Insight, who addressed attendees at Ricoh USA’s last live INTERACT User Conference in 2019. However, jetting ink with nozzles isn’t fledgling tech either. In 1985, Canon Inc. launched its first Bubble Jet desktop printers, which were sold through retail channels, recalled Charles Brewer, president and founder of market research firm Actionable Intelligence. “OEMs were pushing ink in the office back in the ’90s,” he said.
Today’s marketplace, however, paints a bleak picture for office printing. Inkjet’s share is growing because toner revenues are declining steeply, explained Marco Boer, vice president at industry consultancy IT Strategies. “The real issue,” Boer pointed out, “is that with COVID, demand for general office printing disappeared and is slow to come back.”
Many of HP’s customers have strong preferences around both technologies, according to Andy Binder, vice president and general manager of HP’s supplies business. “Some people prefer laser for its print quality and permanence, while others prefer ink for lower cost of operation, especially with general office printing.”
Due to differing customer needs, there may be no clear path to consolidation around one technology or the other. Lexmark International officially exited the inkjet business eight years ago.
“In 2013, we saw the shift away from inkjet toward higher-usage, business color workgroup devices,” said Clark Bugg, director, North America Channel Sales at Lexmark.
While Lexmark, Sharp, and Toshiba do not offer inkjet printers at the high-volume production level, just about every other OEM does. Canon, Epson, HP, Konica Minolta, Ricoh, RISO, and Xerox are heavily invested and poised to seize more page volume in production print environments.
Inkjet is great for production printing and a replacement for offset, noted IT Strategies’ Boer. Competition in the toner-inkjet battle at the production print level is fierce. At stake are millions upon millions of meter clicks, which are available to dealers for the taking.
As part of the changing landscape, 16 months ago, Kyocera entered the cut-sheet inkjet market with the launch of its first production model: the TASKalfa Pro 15000c. The color production printer features 600×600 dpi resolution and can reach speeds up to 150 pages per minute.
RISO’s Sweet Spot
For RISO, Inc., the stars began to align in the inky sky about a year ago, with the raging pandemic acting as a catalyst. From 2018 to 2019, the OEM tracked ten production-print customers that converted 10 million monthly clicks from toner to cut-sheet inkjet. That trend accelerated in 2020, and RISO has seen a colorful production inkjet shift in the first quarter of 2021.
RISO’s portfolio starts at $20,000 [90 pages per minute (ppm)] on the low end and ramps up to $94,000 for a mid-range, 160-ppm device. Oil-based pigment ink dries quickly, requiring no dryer and making for a compact footprint. Over the past decade or so, competing OEMs have acquired B2 and B3 competitors to gain an edge (Canon bought Océ; Xerox purchased Impika). In contrast, some high-end production inkjet presses from Canon, HP, Konica Minolta, Ricoh, and Xerox cost upwards of $1 million, while several models, including some from Canon and Kyocera, list in the $200,000 to $250,000 range. But those new to inkjet may not wish to finance such a hefty investment. RISO’s strategy is to help dealers recapture lost print revenue.
“Dealers are paying attention to production inkjet,” noted Andre D’Urbano, executive director of sales and marketing for RISO. “The COVID effect ravaged some dealerships. We estimate that dealers have lost more than 1.2 billion clicks due to the pandemic.”
To help compensate, Pacific Office Automation rang in 2021 by approaching RISO in early January; five weeks later, the proverbial ink was dry on the agreement. With 27 offices on the West Coast, POA is a $365 million company—and one of the largest office equipment dealers in the United States.
“This [arrangement] would not have happened six, 12, or 18 months ago,” observed D’Urbano, adding that he thinks the trend will migrate eastward as other dealers come on board. “RISO is a good fit for anyone averaging 10 million impressions per month, such as customers serving the education and religious markets.”
RISO’s ComColor GD 9630 color inkjet model is priced at $50,000 as a stand-alone printer. Fully loaded with Fiery (EFI’s digital front end), paper capacity, and other accessories, it’s about $100,000.
“But even at that price point, this equipment lends itself to redundancy,” said D’Urbano. “The ability to buy, sell, and lease more units is an attractive feature to many dealers, as is its relatively small, 16-foot footprint.”
The GD 9630 offers single-pass, full-color printing at speeds up to 160 ppm (letter-size) or 2.5 copies per second. Its print engine is configured with static, inline inkjet heads arranged in parallel. Duty cycle tops out at 750,000 copies, “but even if you average 350,000 and install three units, it puts your output volume at over one million pages per month,” D’Urbano revealed. (Think of his example in terms of incremental volume.)
Production inkjet printers such as the GD 9620 sometimes serve to compliment toner devices, according to D’Urbano. And other times, they are flat-out replacing toner machines, which is when the battles heat up—and sometimes turn cut-throat ugly.
It can be tough for dealers to compete against powerful manufacturers. There are reports that some dealers are side-stepped as their production customers are invited to OEM inkjet events.
“These dealers are understandably upset because their fleets could be depleted,” said D’Urbano. As competition for pages gets messy, dealer disenchantment can be deep-seated when production is taken away from accounts.
“Canon, Ricoh, and Konica Minolta are moving [dealer] clients to multi-million-dollar inkjet devices sold by direct-manufacturer operations,” reported D’Urbano. “The dealers are told to push toner (devices) and steer customers away from inkjet. They are not allowed to sell inkjet. They may get a finder’s fee, but that’s all.”
Committed to Inkjet
While some OEMs are in the process of building out their inkjet product portfolios, others have made up ground. Epson is benefiting from former Toshiba executives who brought their channel expertise in selling office equipment.
“We are in a strong position,” stated Joe Contreras, commercial marketing executive, office solutions, Epson America Inc. “From a technology perspective, inkjet is there. It is a growth business for us in North America.”
According to Contreras, dealers talk, and Epson is listening.
“We hear from dealers, who tell us what resonates with them,” noted Contreras, who spent 20 years in the laser-print segment.
Reliability comes up a lot in dealer group meetings, where owners share their experiences. To keep its finger on the dealer pulse since COVID, Epson has relied on more virtual events, which have been well attended.
Inkjet printing devices tend to feature lower service requirements. “Some of these machines can go for months at a time without a service call,” explained Contreras.
During the COVID-19 challenge, not needing as many techs on-site is a bonus safety benefit. Epson sees potential in what it calls the supplemental product space, including print/mail/fulfillment color-production markets producing higher volumes in the range of more than 250,000 copies monthly. Late last summer, it rolled out three new color, multifunction line head printers: the WorkForce Enterprise WF-C20600, WF-C20750 and WF-C21000 models, which cover from mid- to high volumes at 60, 74, and 100 ppm, respectively.
DivcoData (Diversified Companies, LLC) has installed these WorkForce printers and finishers in its Chattanooga, Tennessee, variable-data statement print/mail facility.
“In the search for equipment to accommodate the long-run print jobs and the large monthly quantities of prints up to 300,000 impressions per machine, we needed color MFPs that could support our high-volume print requirements,” said DivcoData managing partner John Dawson.
Saving time on manual intervention is one big reason that DivcoData opted for the Epson devices. Inkjet printers still have maintenance and service contracts, of course, but pricing them out becomes more strategic for dealers. To grow its installation base, Epson offers an inkjet proposition that is all about total cost of ownership. There is the reduced labor aspect, for example. “You’re not dispatching as many techs,” Contreras explained. He added that fewer parts are consumed, so there are inventory savings as well.
When it comes to economic analyses, dealers demand hard numbers. “And most of them seem open to inkjet, but they make us prove it out,” Contreras laughed, which Epson is happy to do. The bottom line is more flexibility for dealers, which often leads to more profits.
Marketplace Disruption
Like Tesla with electric cars, inkjet may be forcing the print technology issue. Epson and others anticipate market disruption to continue regarding toner and inkjet.
“There’s a shift in the wind,” noted Contreras. But what and when will be the tipping point?
Actionable Intelligence’s Brewer offers his perspective: “Epson only has inkjet, so the OEM needs to continue to build out the channel and gain dealers. Inkjet’s encroachment will continue, and its market share will grow.”
Albeit that market share will still be a shrinking piece of the overall number of pages printed.
Down the road, could inkjet eventually supplant toner? The answer to that $64,000 question is channel-dependent, according to Brewer. “Let’s face it,” he pointed out, “customers just want good [quality] output. It needs to look great, be cheap and reliable. They frankly don’t care about the technology being employed to produce it.”
Will the channel find inkjet more advantageous? If so, Brewer projects inkjet as the winner.
Can Inkjet Compete in the Office?
Low maintenance is one big reason that the channel is reluctant to embrace inkjet in the office. Actionable Intelligence’s Brewer asks: Which would dealers rather sell, $200 inkjet printers with no service calls or $15,000 A3 toner machines that require periodic service?
But inkjet is encroaching on monochrome applications, according to RISO’s D’Urbano.
“I tell dealers that color toner is ‘safe’ at this point, but black-and-white toner is not safe,” said D’Urbano. “Everyone is going after black-and-white copies. We see it in schools, and it’s only a matter of time until it comes to the office.”
Up until now, there has been little impactful revenue growth in inkjet MFPs, according to IT Strategies. “Percentage-wise, it’s easy to show double-digit growth of Canon and Epson inkjet copiers, but it is from such a small base that it is inconsequential in the context of the copier market overall,” said Boer.
The printing spend is inconsequential compared to what most office users spend on information technology in general, according to Boer, which is why so few are interested in moving to inkjet.
“It wasn’t always that way,” Boer said. “Print used to account for up to 3% of a company’s expenditures; today, it is below 1%. So, saving people money—while disrupting the existing relationships they have with toner copier vendors, introducing a different type of image quality (inkjet will always be flatter in color gamut than toner, which sits on top of the page), and the reduced ability to print on a broad range of media—most people aren’t going to be interested in change.”
Epson would disagree as the company looks to make inroads in the channel with its A3 and A4 inkjet machines.
Epson’s A3 inkjet devices have much to offer dealers in terms of reduced running costs and intervention rates, a point that Epson executives are quick to make. The benefits of selling the company’s inkjet devices include:
· Fewer moving parts
· Less waste
· Lower energy requirements
· Overall speed
When people discuss printer speed, it’s usually measured in pages per minute. But output speed is only part of the whole equation. According to Contreras, Epson’s PrecisionCore heat-free technology means no warm-up time is required. Factoring warm-up times into the formula slows down toner devices that tout impressive ppm speeds, which Contreras maintained will only increase on future inkjet devices.
Meanwhile, D’Urbano calls color toner the last bastion of profit margin in the industry.
“Everyone is trying to maintain the business model of selling a 4¢ color page [cost] for 12¢,” he said.
That’s opposed to 7¢ (cost is less than 1.5¢ per page) for cut-sheet, color inkjet. Color toner still reigns superior in terms of print quality, D’Urbano acknowledged. Whether color toner is worth the quadrupled per-page charge depends on what is being printed.
Margins get even thinner for monochrome toner, which costs about ½¢ per page and sells for 3¢. D’Urbano contends that more print shops are eager to convert their black-and-white toner jobs because color inkjet is more profitable.
Lexmark still sees a bright future for toner. “There really is no comparison,” said Lexmark’s Bugg, citing lack of duplex performance and lack of recyclability as two considerable environmental disadvantages of inkjet.
“Inkjet technology at a fundamental level puts water on paper, creating an inherent disadvantage versus laser,” he noted. “The largest disadvantage is the need to use specialty/high-quality paper to get good print quality results. This is especially true when printing high-color coverage documents and when printing on both sides of the paper. Inkjet on standard copier paper looks faded, bleeds through the front side when duplexing, makes output feel damp, and causes severe paper curl once allowed to dry.”
Lexmark thinks the high reliability and high print quality value proposition of laser will continue to be favored by most business customers. “We do not think inkjet will supplant toner. At the end of the day, we don’t see it as one or the other, but as each having its respective place,” said Bugg.
But there is another dynamic in place that could raise color inkjet device’s profile. The COVID-19 pandemic was a shot in the arm for home office inkjet printers, with demand for smaller desktop models skyrocketing as employees stopped commuting and were locked down in homeboffices.
“We saw significant, year-over-year A4 growth in 2020,” reported Contreras.
Similarly, HP had a strong Q4 largely due to inkjet sales, according to Actionable Intelligence’s Brewer.
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