COMPUTER BUSINESS REVIEW

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Issue Date: November 2003 (es)

Pressure on smaller players as printer market tightens up

1 November 2003

Consolidation continues in the printer market and it is doubtful if the decline in growth experienced by the industry during 2002 will be totally reversed.
"So the pressure is on the smaller players who, unless they are focused in a well-established niche market, are likely targets for acquisition," says Hester Pescivolo, national product manager: Channels at JSE-listed Square One Solutions Group.
Demand for colour printing at home and in the office remains on the increase and colour laser is the fastest growing technology. Another driver for the industry has been growth in the use of network printers in large business workgroup environments.
"From Square One's viewpoint we have benefited from the introduction of a new range of more affordable office printers from Xerox," says Pescivolo, "and with the rand continuing to strengthen against the US dollar a better buying environment is being created. The marketplace is picking up and we are seeing more activity which looks promising for a better year end."
Pescivolo says vendors are still heavily reliant on after-sales annuity revenue streams from maintenance and consumables and therefore need to continue building up their installed bases.
"We need to look at new business models and new ways of giving customers what they want. This means selling solutions instead of just boxes, and continually adding value."
She adds that affordability has always been an issue for first time buyers and for businesses requiring replacement equipment. The need for new printers is invariably compared against the cost of maintaining existing units and making do with aging technology. "So we also have to come up with more innovative methodologies and financing solutions."
For more information contact Hester Pescivolo, Square One Solutions Group, 011 321 5900.


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