Canon stated that since Ricoh bought IKON, it has signed up only 23 new dealers in the U.S.

More details on the new alliance between Canon and Hewlett Packard

- HP will begin advertising Canon copiers on its website on 11/1/09
- HP will resell imageRUNNER, imageRUNNER ADVANCE, and imageRUNNER ADVANCE PRO series
- Speed range from 23ppm to 105ppm devices
- According to Larry Trevarthen, HP’s Worldwide Director of Market Development, HP also has access to the imagePRESS production print products
- All the devices will initially carry the Canon name
- The products will be identical to what Canon dealers sell, including supplies
- Service will be provided by a Canon factory direct branch primarily. Only if there is no Canon branch in the area, will the service contract be offered to a Canon dealer.
- Canon currently has 60 factory branch locations, but will expand to 90 locations within 2 years
- HP will support Canon copiers with its Web JetAdmin utility
- HP will also modify its Universal Print Driver to support Canon copiers
- Starting in early 2010, HP will begin to develop its own print controllers for the Canon copiers

Details of the HP / Canon Alliance

Canon announced it will allow Hewlett Packard to sell most of its copier product line.

Details:

• Expansion of 25 year relationship between Canon and Hewlett Packard
• This is a one-way agreement, as Canon will not have access to HP devices
• HP will sell Canon branded B/W and color copiers from segment 2 up through segment 6
• Initially, HP will market the Canon brand, but then will switch to offering the Canon copiers with the HP name on them as soon as it develops HP JetDirect based print controllers for them
• All current HP LaserJet and Color LaserJet devices are made by Canon
• HP will also resell Canon’s imageWARE and MEAP solutions
• Canon is looking gain back marketshare when it lost all IKON locations when IKON sold out to Ricoh, and when DANKA sold out to Konica Minolta in the U.S.
• This is fifth time that HP has attempted to enter the office copier space
• HP will use expanded product offering to grow its Managed Print Services program, “creating an integrated platform and brokering a network of service partners that will enable resellers to sell contractual print offerings"
• "create new global business unit”, called Managed Enterprise Solutions, led by Bruce Dahlgren (former Lexmark executive) and headquartered in San Diego, CA
• HP, which recently acquired IT services provider Electronic Data Systems (EDS), will use 500 certified EDS account managers to sell managed print services with this new expanded device offering to companies in the U.S. (EDS currently accounts for 20% of HP’s MPS sales)
• While HP will do the billing for contracts that include Canon branded devices, HP will subcontract the service to either Canon branches or Canon dealers, based on customer request
• Customers will contact HP to place service calls, and HP will then dispatch to Canon branch or dealer
• HP claims to have 2000 customers under MPS contracts, including 450,000 devices and 18 billion pages per year.
• HP claims to win 60% of all MPS bids it participates in.

Global Printer, Copier, MFP Market Sees 20 Percent Decline In First Half Of 2009

Office printing devices drove the overall decline in the global print market, with a 24.5 percent decrease in the first half of the year compared to the first half of 2008.

Some great information for you to use in your FY2010 planning. With units declining how do you increase your market share and find other sources of revenue--like MPS.

http://www.crn.com/hardware/219500374;jsessionid=KFQSF1LOTLXB1QE1GHOSKH4ATMY32JVN?cid=CRNFeed

Ricoh: Getting Ready to Rumble?

The August 3 issue of Barron’s had a great article on Ricoh and their acquisitions, including InfoPrint and IKON. The link below will take you to the article.

One item that was startling to me was the quote “IKON, which also hasn't delivered a profit to its new parent,….” It would seem to me that the war between RiKON (Ricoh owned IKON) and Canon is having a significant impact on IKON’s ability to make a profit. Word is that street level equipment margins at RiKON have been halved, to 14%, over the last year. Service margins are also taking a hit as RiKON fights off Canon’s assault on their service base, having to match aggressive offers. Whatever the reason it is clear that RiKON has been operating in the red for the last year.

More perplexing are the future revenue and expected operating profit EPS from RiKON, at ¥280 billion and ¥8 respectively. Converting to dollars, revenues would equal $3 billion with approximately $65 million in operating income. Let’s assume there were subsidiary sales of approximately $350 million between Ricoh and IKON, this still represents an approximately 30% decline in IKON’s pre acquisition revenues and an almost 40% reduction in operating income. Wild to say the least.

Ricoh has been reorganizing their direct operations for years. Well informed individuals have stated that Ricoh direct has been losing money for years, with those losses accelerating. It seems to make sense for Ricoh to combine their current RBS operations with RiKON. The question is not if but when, and it appears as if the current results indicate that the still nebulous answer is “sooner rather than later.” If Europe and Canada are any indication—both of which have been combined with the Ricoh direct operations—it could be real soon.

It is nice that Ricoh takes risks to increase their business. We will see how Ricoh’s IKON acquisition works out long term. I believe a lot of changes will need to occur if it is going to be successful. When this acquisition first occurred I stated it would be great for the independent dealer. One year later and clearly it is great for the independent dealer. Revenue is cratering, the entity is losing business, Canon is assaulting the base: In a nutshell RiKON is focused on survival. Carpe Diem!

http://online.barrons.com/article/SB124908694002798273.html

Printer Business Drops In Q1: IDC

The economic downturn has taken its toll on the printer business, causing shipments to fall more than 17 percent worldwide compared with last year, with color laser multifunction devices a relative bright spot in an otherwise gloomy market.

Follow the link to read this article: http://www.crn.com/hardware/217701335;jsessionid=PNGJBEKCRPJWGQSNDLPCKH0CJUNN2JVN

Thank you to Joe at Document Solutions Daily for introducing us to this great information www.kworkspublishing.com

Toshiba Puts Rumors to Rest

In a memo to “All Toshiba Copier Dealers,” Mark Mathews, TABS President and COO, put to rest the rumor that has been gaining momentum over the last three weeks: That Canon was buying TBS, TABS direct organization.

Quoting Mark’s memo, “As valued Toshiba dealer partners, I felt it was important to address any TABS-related rumors directly and immediately. Toshiba Corp. is not currently, nor has it previously been in discussions with any manufacturer regarding the potential purchase of its MFP business, TABS or Toshiba Business Solutions (TBS), nor does it have any future plans in this area. Please be assured, and feel confident in assuring your customers, prospects and employees, on these points. Any related rumors to the contrary are completely unfounded and without merit.”

Strategy Development did not participate in permeating this rumor. When first contacted by industry players asking us if there was any validity we did what research we could within our network and determined that the rumor probably did not have validity. That was our message to whoever asked over the last few weeks.

I provide that retrospect because of this next statement. We do believe that consolidation will occur in the hardware manufacturing space. Unit sales continue to decline and it appears as if that decline will continue; I will talk about this in my next post. So in a less public, because of foreign stock listings and manufacturing plants, and less dramatic fashion the copier industry seems to be mirroring the auto industry: Same level of manufacturing with lower unit sales.

We are not a research company so we offer no opinion on how quickly that consolidation will occur or who might merge with or buy whom. We simply use the information we get to help our clients prepare for a prosperous future in the space. It will be those that don’t plan that will be in trouble; those that do will still thrive.