HP Reveals Details About New Copier Lineup
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1 Gartner Dataquest Alert HP Reveals Details About New Copier Lineup Product Details Last August, HP announced that it had forged a strategic alliance with Konica to market the latter's copier engines, but no details were revealed at that time (see "HP Leverages Konica's Strength to Penetrate Copier/MFP Market," HARD-WW-DA-0100). On 18 November 2003, HP announced that this alliance has resulted in three different models in Segments 4 and 5: HP LaserJet 9055mfp 55 page per minute (ppm), $18,500, plus $3,000 for the controller HP LaserJet 9065mfp 65 ppm, $25,000, plus $3,000 for the controller HP 9085mfp 85 ppm, no pricing available yet (initial controller will be by EFI) In the United States, the 9055 and 9065 are available immediately. In most Western European countries, they are available as of December 2003, and in selected parts of Eastern Europe and Middle East and Africa, from But the 9085 will not be available until March. These three new models feature HP's new Digital Sending Software 3.0, a document management solution for the archival and storage of documents. They also have an embedded Web server as well as HP Web JetAdmin 7.5 and HP AutoStore. The HP philosophy is that models will be built to order. Although you can buy a stand-alone copier, HP assumes that connectivity will be in the 90 percent range. Optional accessories for the 9055/9065 are as follows: HP post-insertion kit (cover inserter) $1,045 HP 4,000-sheet high-capacity input $2,000 (letter), $3,185 (11 x 17) HP punch kit (two- or three-hole) $775 HP copy controller hard drive (20GB) $850 HP print kit (includes jetdirect 615n, 10GB hard disk drive (HDD), 256MB printer memory, 256MB additional copier memory, PCL 6 and PostScript 3 drivers) $3,000 Monthly duty cycle on these two models is up to 300,000 pages. 19 November Gartner, Inc. 1
2 Channel Particulars Attimeoflaunch,HPchoseeightofwhatitcallsVIPSelectpartners: Associated Business Systems in Portland, Oregon Electronic Systems in Virginia Beach, Virginia IKON in Malvern, Pennsylvania Laser Works in Plano, Texas Lewan and Associates in Denver, Colorado Marco Business Products in St. Cloud, Minnesota Print in Kirkland, Washington Uinta Business Systems in Ogden, Utah Of this list, IKON is the most strategic because it has nationwide capabilities, while the others are regional in scope. In addition, HP will sell these new products directly to corporate, enterprise and large public sector customers. The profile that HP had in mind while choosing these partners is as follows: Copier competency From a sales and service perspective Technical competency Around software/solutions/networking Significant interest in optimizing business practices Examples include supply chain, inventory management and remote device management Understanding of a balanced deployment strategy and the value of connected devices Willingness to embrace HP's leadership role in connectivity standards Ability to meet contract requirements and performance commitments The VIP Select partners have access to the complete HP multifunction product (MFP) line, including exclusive access to the new digital-copier-based products. HP's recruitment plan for this product line has two phases. Phase I occurs in the first half of fiscal The plan at the time of launch is to have eight U.S. partners (listed above) and six Canadian partners. Phase II occurs in HP's second fiscal half. During this phase, HP's goal will be to identify new partners to fill out geographic coverage, in addition to managing existing partners. Obviously, by choosing IKON as one of its VIP select partners, HP already has quite a head start in terms of nationwide coverage. 19 November Gartner, Inc. 2
3 Gartner Dataquest Perspective Clearly, HP is very serious about playing in the space owned by the traditional copier vendors. This of course is not HP's first foray into copiers. In 1998, the company introduced the Mopier, a 32- ppm print-centric machine with an attached platen that was of its own making. This machine was a spectacular failure in terms of making a dent in the copier market despite HP's vaunted claims and intentions. HP did better with the second generation of copiers, again of its own making, to the tune of almost 93,000 machines in In HP's case, the old saying that "the third time is the charm" may really be true. One difference is that the machines are coming from a copier manufacturer, which means that they have full copier functionality. The logical choice was to have gotten them from its printer partner, Canon, but each side has refrained from invading the other's turf. HP had no other choice, if it wanted to market copiers from a copier manufacturer, than to go with another manufacturer. The other big difference is that this time, HP has made sure that it is fully backed by a service organization accustomed to copier repair in fact, it is the first in the list of competencies HP was looking for in partners. Moreover, with the deployment of HP's Total Print Management Solution, it needs to have an integrated family of hardware, software and services. These three new machines go a long way in terms of building the hardware family. In summary, HP now has the copier/mfp range and channel to allow it to compete effectively for corporate page count. The selection of Konica as a partner to supply Segment 4 and Segment 5 MFPs is a smart move. Konica has long been respected for having a very capable and reliable line of high-end monochrome engines, usually with great duty cycles and lower supply costs. Because of this and given HP's strength in connectivity and networking, it is likely that enterprises will view HP's MFP offerings more favorably than before. This particular strength of HP gives it a significant advantage over copier vendors, which have had varying degrees of success selling full multifunction configurations of their digital copiers. Regardless of HP's failure in the Mopier series afewyearsago,customerswhopurchasethesemfpsfromhp andwhowillgetthestrong copying capabilities of the Konica-based engines will also benefit from HP's proficiency in seamlessly delivering the workflows that enterprises have grown accustomed to delivering to their HP-centric network printers. It is also likely that as customers get used to sending their print jobs to these devices, they will make fewer trips to make copies and finish documents. Not only will these devices do both jobs, but they are also branded by a company that built its business on the slogan that "nobody ever gets fired from buying HP." The choice of IKON is certainly an interesting development. Since IKON is an independent entity, it has the right to be manufacturer-independent and proudly proclaims itself so. However, it is already a strong partner for both Canon and Ricoh products, accounting for up to 40 percent of Canon's business and a sizable percentage of Ricoh's. Neither can be happy with this announcement. But in the sense that IKON competes against other Canon and Ricoh dealers, it must show value-add to differentiate itself in the eyes of its customers. Some conflict is inevitable and may ultimately be healthy. IKON already sells both Segment 4 and Segment 5 copiers from both Canon and Ricoh. Will the ability to offer a third choice help or hinder? If IKON sells more machines in total, then this new development will help IKON. If Canon and Ricoh sales decline, obviously these two companies will suffer. There is much to be said for the power of the HP name. Almost ironically, HP was identified as possibly one of the suitors to buy IKON, but as it turns out, HP is still getting the advantage of using IKON as a major channel. 19 November Gartner, Inc. 3
4 What is the impact of this new deal by HP on the copier industry? First of all, the great value-add that HP brings is its powerful networking technology, the HP name and the HP reputation in the IT community. HP made a pretty big dent in 2002, but now it has the opportunity to do a lot more damage because of the products and channels it has chosen. Who will jump to buy copiers from this IT giant? Certainly its own customer base of satisfied printer customers who have been begginghptogetintothecopierbusiness soastobeabletobuyalloutputproductsfromone vendor. Copier customers who have been unhappy with current copier vendors can be convinced of the superior networking technology that HP has incorporated in these three new products. According to HP, its goal is to capture 8 percent to 10 percent of Segment 4 and Segment 5. If HP reaches its goal, it would capture approximately 25,000 units in the United States not a bad number for a relative newcomer. It is also a validation of copier functionality customers still have a need for a multifunctional solution. Printers are not enough. This is a pretty strong message, ironically being brought to market by the king of printer vendors, HP. By Lynn Ritter, Don Dixon, Sharon McNee and Tosh Prabhakaar 19 November Gartner, Inc. 4
5 This document has been published to the following Marketplace codes: HARD-WW-DA-0108 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: The content herein is often based on late-breaking events whose sources are believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The conclusions, projections and recommendations represent Gartner's initial analysis. As a result, our positions are subject to refinements or major changes as Gartner analysts gather more information and perform further analysis. Entire contents 2003 Gartner, Inc. and/or its Affiliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden
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