Identifying Hot Color Opportunities

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• Identifying Hot Color Opportunities

Industries and applications that will lead in the
growth of color printers and color MFPs.
Steve Feldstein, Sr. Marketing Manager MFPs, Oki
Data Americas
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The Hot Color Panel

• Steve Feldstein, Senior Marketing Manager, MFPs,
  Oki Data Americas, Mt. Laurel, NJ
• In over 15 years with Ricoh, Sharp, Minolta and
  Oki Data in product development, product
  marketing and national account sales, Steve has
  successfully launched over 30 products, including
  Oki Printing Solutions recent color MFP line.
• Jeff Eshelman, Reliable Office Solutions,
  Riverside, CA
• Tony Machabee,
• Machabee Business Equipment
• Reed Melnick, Nevill Business Machines, Inc.,
  Carrollton, TX

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Hot Color Opportunities Todays Presentation

• Growth of Color
• Attitudes Toward Color
• Color MFPs Take Hold
• The Manufacturer Perspective
• The Dealers View
• Questions Answers

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Global Color Printer Growth Forecast

• In 2004, color page technology was 2.9 of
  worldwide printer market shipments
• In 2009, it is expected to represent 9.3 of
  global printer shipments
• Color page devices will grow at a 22.1 CAGR
  during the forecast period.
• The highest growth regions are the rest of the
  world (ROW), Western Europe, Asia/Pacific
  (including Japan), and the United States,
  respectively.

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Forecasted Growth by Segment, 2004-2009

• 1-10ppm segment in 2004 a 50.7 share, largest
  portion of worldwide color printer market. By
  2009, expected to shrink to 34.2
• 11-20ppm segment in 2004 a 27.1 share. In
  2009, expected to grow to 34.9 share.
• 21-30ppm segment in 2004, a 21.1 share (growth
  of 122.3 in 2004). By 2009 expected to grow its
  share to 25.9
• 31-44ppm segment in 2004 a 1.1 share (a growth
  of 459.1 in 2004). By 2009 expected to increase
  to 4.6
• 45ppm segment Expected to grow its share by
  2009 to 0.2 from 0 in 2004

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U.S. Laser Color Forecast
2004-2009 CAGR Printers 17.5 MFPs 27.6
Source IDC
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Price/Performance Trend Current Positioning of
Technologies
Source Jamieson
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Price/Performance Trend Current Positioning of
Technologies
Source Jamieson
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Office Color Adoption Drivers

• Office color adoption has been driven by lower
  hardware acquisition, aftermarket consumable
  costs, and increasing user education about the
  benefits of color
• Color MFP is a here and now play.
  Opportunities abound for vendors who have right
  products, are committed to robust follow-ups and
  are willing to invest resources in the channel
• Market forecasts show a transition from
  black-and-white only devices to color-capable
  machines
• Value of color is understood by users and channel
• Major inhibitor to color adoption is cost
  (hardware and operating costs)

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Market Drivers

• Color
• Greater sales response (increased sales activity)
• Better customer retention (customer remember the
  ad/bill)
• Faster response (pay bill faster)
• Improved document communication (information can
  get lost if in black-and-white)
• MFPs
• Cost savings Hardware costs are reduced by
  consolidating functions (1 box instead of 3-4)
• Efficiencies can be gained with ordering,
  inventory and general management
• Maintenance requirements can be lessened with a
  lower device count
• Space savings Device consolidation
• Simplify work processes, network accessible

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Attitudes Toward Color Growth
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Attitudes Toward Color by Company Size
Summary of strongly agree and somewhat agree
responses
Source IDC
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Businesses Speak When will majority of output
devices be color?
Source IDC
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Driver of Increased Color Printing
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SMB Feels Strongest About Color Adoption

• Small Business Segment more optimistic about
  expansion of color capabilities and Color MFP
  usage
• 51 plan to acquire a Color MFP
• 70 plan to increase our deployment of color
  capable output devices for all our employees
• Optimism a result of recognition of colors value
• High percentage of Small Businesses in
  Professional Services
• Small Businesses recognize they must present
  quality on par with larger businesses in order to
  compete
• 93 agree that Color in external documents is
  more effective than black only in supporting
  revenue-generating efforts

Source IDC
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Color MFPs Take Hold
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Color Penetration of Total Printer and MFP Laser
Shipments
2004-09 CAGR Printers 17.5 MFPs 27.6
Source IDC
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Color Copier MFPs Dominate but Printer MFPs
Coming on Strong
Year to year growth Printer-based 78.9
165.3 Copier-based 73.1 25.9
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Steady Growth in Color MFPs for Office
2004-09 CAGR Color 13.2 Office 27.0
Source IDC
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Departments That Will Use Color MFPs
Source IDC
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Color Laser Market

• Copier-based MFPs dominate the marketfor now.
• Printer-based MFPs to nearly equal copier-based
  configurations by the end of the forecast period
• Low-end market transition anticipated (1-20ppm)
• Pricing dynamics occur with escalated low-end MFP
  activity
• Color MFP to color printer price ratio
• Color MFP to BW MFP price ratio
• Cost-per-page ratio narrowing color MFP vs. B/W
  MFP

Source IDC
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The Manufacturer Perspective
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The Manufacturer Perspective

• Exciting new revenue stream with color MFPs
• Opportunities vs. Comdex channel
• Trends in pricing options make color more
  affordable
• Multi-tiered pricing based on color commitment
• No monthly minimums on color volume
• Selling hardware for less and making difference
  in service plan
• Charging for scanning
• Education is king
• Solution Selling more important than ever
• Understanding the customers requirements,
  expectations and needs
• Make workflow integrated into customer business
  processes

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The Manufacturer Perspective

• Software innovation, ease-of-use spur color
  adoption
• User-friendly software helping increase color
  demand throughout companies of all sizes
• Retail Industry Color Growth Leader
• An early adopter of color, recognizing that it
  aids in-store experience
• Software applications for signage helping create
  greater demand, by enabling impressive range of
  sign creation
• Tent cards, shelf strips, cling film and banners
  all possible on one color machine
• Bringing color in-house cuts costs from
  outsourced printing, delivers more control and
  flexibility, and responsiveness to competition

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The Dealers View
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Color Opportunities by Vertical/industry

• Where color has grown first
• Graphics business
• Retail industry
• Financial services
• Education
• Small business
• Where will it grow?
• Real Estate, insurance, architecture?
• Jeff Eshelmann says
• Reed Melnick thinks
• TBD