2018: “No Collusion!”
The phrase has become part of the political vernacular, although it remains to be seen if
anything comes of it all. Meanwhile, in the hardcopy world, we’ve also got an oddly unanticipated outcome that begs
the question whether the players were secretly and illicitly in cahoots to assure the result they all wanted.
I’m talking about is the complete failure of compact, economical A4 MFPs to supplant significant swaths of the market
for oversized, overpriced A3 MFPs in offices. It ain’t gonna happen. Not now. Not tomorrow. Not ever. But did this outcome
result from dreaded collusion? Nope, it’s not. That’s because Collusion
is just one of the “Three C’s”
that can explain how an unexpectedly irrational outcome can occur. The other two are pure Coincidence
and simple Common Interest.
entails intentional, often secretive efforts among coconspirators to achieve a desired outcome. Coincidence is the complete
opposite. Stuff just happens randomly in parallel to produce a particular result, even if it’s unexpected, unlikely
or flawed. Common Interest is an in-between explanation. It’s when shared preferences operate independently to nonetheless
produce a commonly desired outcome.
With the failure of A4 devices to supplant A3 devices in the office MFP market, there’s
no need for an investigative committee or a special counsel. Hardcopy vendors didn’t get together in a smoke-filled
room and agree on a common strategy. But this also wasn’t just some random throw of the dice. Rather, it has resulted
from the overwhelming shared financial interests of hardcopy vendors, as well as independent dealers.
It also certainly helps
when there ceases to be any credible threat from capable and disruptive outsiders intent on spoiling the fun. So “everyone”
is getting what they wanted. Oh yeah, except for those pesky customers. Those stupid rubes continue to pay through the nose
for A3 hardware that delivers far more than they need.
I’m actually hard-pressed to think of a similar circumstance
from another market in IT or elsewhere. Generally speaking, we’re accustomed to seeing “free” markets respond
to unmet demand or underserved customers with new players, new products, or new platforms. No small cars from GM and Ford?
We got Toyota and Honda. Music albums are too pricey? We got iTunes. Taxis are expensive and inconvenient?
We got Uber.
The fact that collusion wasn’t needed to forestall a meaningful A3-to-A4 transition doesn’t
make the end result any less suboptimal for individual customers or for the economy as a whole. Just think of all the more
productive things customers could do with the money they’re wasting on A3 devices when comparably equipped A4 models
could easily suffice. How about investing in IT security? Or developing new products? Or perhaps giving raises to employees?
It’s what academics refer to as “economic inefficiency.”
While A3 copiers and MFPs have been the
office norm for decades, that wasn’t always the case. Mimeo and Ditto machines were mostly letter or legal size. And
the seminal Xerox 914 launched in 1959 wasn’t an A3 machine. Frankly, I’m at a loss as to why the industry long
ago settled on the idea that A3 paper handling was a sine qua non of design up and down the
Was it the idea a customer would only buy one or a few of these things, so each one had to be able to
handle everything? Was it a carryover from the world of printing presses? Or was it a way copier vendors could emphasize how
they were different from what came before? Regardless, it was a really bad deal for customers. And it stuck. Even in the copier
boom years, no one championed the idea that customers could buy twice as many machines that cost half as much, although it’s
something HP figured out when it launched the first LaserJet printer in 1984.
Instead, the ongoing prevalence of A3 devices
in the office MFP market is a case study in how the power of sellers’ shared business models and marketing have won
out over common sense and customers’ own financial self-interest. From the advent of complex leasing arrangements in
the 1960s, to a singular focus on cost-per-page in the copier-versus-printer wars of the 1990s and early 2000s, to the click-focused
MPS transition over the past decade, the dominant business norms in office imaging have all served to mask the massive A3
hardware price premium.
Of course, it didn’t help that the top printer vendors were so excessively naive, simplistic, ill-prepared
and mistake-prone in their efforts to push A4 alternatives. After years of overpromising, underdelivering, and ignoring channel
and business model issues, HP, Lexmark, Samsung and OKI to varying degrees gave up or proved ineffectual. And not a single
A3 MFP vendor has ever more than halfheartedly put forth an occasional competent A4 platform without almost immediately disowning
it and assuring failure.
So unless some nervy incumbent vendor goes for broke in the industry’s future waning days,
we’re all gonna ride those A3 MFPs into the sunset. But perhaps it’s time to tone down the smarmy “We’re
all about the customer” rhetoric?
2018: “Let the Games Begin!”
Something tells me this time things are different ... real different. I’m
talking about the announcement that Fujifilm is sorta-kinda buying Xerox. I expect this deal — even if it gets modified
and perhaps even if it falls through — will prove to be the long-awaited catalyst that triggers a final round of hardcopy
Printing has had its share of boy-who-cried-wolf moments when it comes to predicting the time is nigh
for industry consolidation. Previous M&A announcements never ended up triggering a rash of other deals. Not Konica buying
Minolta back in 2003. Not Ricoh purchasing IKON in 2008. Not Canon acquiring Océ in 2009. And not the twin 2016 announcements
that a Chinese consortium would buy Lexmark and that HP would acquire Samsung’s printing business.
So what’s different
this time? Five things. First there’s the size of the deal. About $8.6 billion will change hands (a big part of that
several times) in order to create the “New Fuji Xerox.” That’s small potatoes in the gluttonous world of
corporate M&A these days, but it’s much more money than in any previous print-related transaction.
the timing of the deal. In some ways, it’s counterintuitive. After a frighteningly miserable 2016, 2017 turned out to
be an OK-ish year for the majority of the industry, with improvements in both sales and profits. And it was an almost good
year for a few vendors. But clearly printer companies now see this as just a temporary lull; it’s the eye of a hurricane.
Things will only get worse, so it’s time to hunker down. And vendors see safety in bigger numbers.
Third, there’s the
context of the deal. For two decades, there’s been a subtle but significant and continual shift in the locus of power
in the office printing industry from channel players to vendors. But that’s changed abruptly in the past year or two.
While everyone was obsessed with which vendors might buy each other, the real M&A action (and money) quietly shifted to
the dealer side. We’re fast heading toward a much “lumpier” landscape with a lot fewer, larger and more
powerful dealers who together will determine which hardcopy companies win and lose. There won’t be room for all of today’s
Fourth, it’s Xerox. The brand and company ain’t what they used to be, but Xerox is inextricably linked
with office imaging. And when Xerox does something — anything — it tends to get more attention from both inside
and outside the industry. And even in the face of considerable challenges, the New Fuji Xerox is likely to be a more formidable
competitor than the old Xerox.
And fifth. There’s a palpable sense of disequilibrium paired with a scent of blood in
So who’s the next contestant on “Let’s Make a Deal?” I don’t know, but I do believe
the industry is coalescing into four distinct groups of companies. It’s the dynamics within and between these groups
that will determine the next dealmakers.
First, there are the Mega Vendors. That’s HP, the New Fuji Xerox, Canon,
Ricoh and Konica Minolta. Their sheer scale ($10-$20 billion in printing revenue), channel footprint, and breadth of offerings
mean they’re here for the duration. They’ll be able to expand into adjacent “document” services. And
more importantly, they’re moving into industrial inkjet printing. These companies are probably too big and too print-centric
to be acquired, although Ricoh might prove to be a wild card. More likely, these vendors will themselves become serial acquirers,
but their prey will be mostly smaller industrial print technology add-ons.
Then there are the Twin Tweens. That’s Epson
and Brother. They’re moderate in size, and each performs pretty well in its own domain. They’re trying to move
upstream and into new channels to grab a bigger piece of the office market. Each has a toehold in industrial printing. While
both are somewhat diversified, printing is still their largest business. And although M&A has not been part of their DNA,
Epson and Brother may well confront a new eat-or-be-eaten dynamic.
Next is the Fish-or-Cut-Bait Crowd. That’s Kyocera,
Toshiba TEC, Sharp, OKI and also Lexmark. Each is part of a larger diversified company, although much less so in the case
of Lexmark. Their hardcopy revenues range from under $1 billion to over $3 billion. Kyocera, Toshiba TEC and Sharp are decently
stable with a good range of office devices, but they’re not much on the desktop or in industrial printing. OKI is smaller
and perpetually struggling. And Lexmark is in its own world these days. Sharp (with its sugar daddy Foxconn) has spoken of
making a big buy that will move it up the printing ranks, but OKI is likely to wither away. So does that leave Toshiba TEC
and Kyocera in a Mexican standoff?
Finally, there’s the Industrial Crew. You recognize names like EFI, RISO and Memjet,
but there are lots of lesser-known players, such as Xeikon and Screen, and a panoply of niche vendors in everything from textiles,
to labels, to boxes, to signage. They’re smaller companies who hope that industrial digital printing grows fast enough
and soon enough — before their funds are depleted or their investors grow too weary from the wait.
Yup, it’s gonna be
the race of a lifetime.
December 2017: “Our Own Fake News”
At any given moment these
days, my inbox seems to be flooded with results from various surveys and polls conducted by or on behalf of MFP vendors and
imaging solution providers. Along with fact-free blog posts, vacuous tweets, and self-congratulatory Facebook missives, producing
data on “what real people really think” has apparently become obligatory in the cool new world of B2B marketing.
But just because this trend is hardly unique to the hardcopy industry, doesn’t mean we shouldn’t hold our own
accountable for jumping on the “fake news” train.
Here’s a sampling of items that have crossed
my desk in recent months. Canon in December proclaimed that a survey it sponsored found “60% of enterprises will implement
digital transformation strategies by 2020.” HP in September released results from a consumer photography survey that
found “Germans like to photograph a lot.” Ricoh, also in September, revealed results from a survey of European
workers that found “81% believe new technologies such as automation and AI are changing how we work.” In November,
a Brother survey found two-thirds of SMB companies feel they need to do a better job “increasing the efficiency of business
processes,” and about half said “cutting corners on office equipment sometimes backfires.” And YSoft in
August determined that 52% of younger US workers thought their companies had “too many paper-based
Can you say, “Duh ?” I admit I’m cherry-picking these findings, but such “insights”
are typical of what vendors rush to tell the world. Sadly, these divinations are right up there with “people like mom
and apple pie,” and “most folks prefer lower taxes.” Will these genius revelations never cease?
that these efforts are necessarily intended to mislead or disappoint, but far too many of these surveys and polls end up doing
one or both of those things because they suffer from two serious and intertwined flaws.
First and quite strangely, there’s
often no compelling reason why a particular hardcopy vendor or solutions company is bothering to sponsor or conduct such an
information-gathering activity. All too often, the topic is some variation of workplace/workforce/workstyle meets technology/solution/service
to produce innovation/transformation/evolution. Yet the questions asked are so vague — and the likely answers so obviously
predictable — that one wonders why a company would go to the trouble and expense.
Other times, it’s like the vendor
is hoping to position itself as a source of “basic research” regarding the IT landscape. Or it expects to discover
some psycho-sociological “truth” that academic researchers have missed. But that thin veneer of pseudo-selflessness
all too often yields “findings” that are of little or no value and have minimal applicability to the vendor’s
present customers or its future business. Moreover, I’ve yet to see a single one of these polls that explicitly —
or even implicitly — tries to answer that most fundamental of all questions: “So what?”
if the underlying goal or premise of the polling activity has merit, very often the methods employed by the vendor or on its
behalf are somewhere between questionable and laughable. It can be everything from a weak survey design, to badly worded questions,
to poor sampling methodology, to minuscule sample size. For example, one of the snippets I referenced earlier came out of
a mere 100 responses to an online SurveyMonkey questionnaire. Really?
Put these problems together, and you get our industry’s
own version of what I call “fake news.” Vendors produce surveys that by design are unlikely to reveal any meaningful
findings or actionable information. And they compound this by employing methods and tools that are incapable of assuring the
findings are reliable or even real. It’s sort of a new and unwelcome spin on an old saying. “Those who can, do;
and those who can’t, sponsor surveys.”
That’s why in my role as an industry analyst and newsletter editor,
I pay little attention to these increasingly common PR pronouncements. And I have to wonder if anyone else pays them heed.
Aside from the vendors who want to create a vague aura that they’re on the leading edge of momentous change, one has
to wonder why the companies bother with these activities at all.
And then there’s the matter of opportunity cost, which
to me is the most frustrating aspect of these misbegotten polls and surveys. Instead of spending time and money trying to
be seen as disinterested market observers, vendors should be collecting and sharing data on what their customers, sales prospects
and channel partners are doing “down in the trenches,” so to speak.
I’m still waiting for the first MFP vendor
who produces a credible report on why customers chose their products over those of the competition. Or what about a poll on
how low color page costs will really need to go before companies are comfortable shifting en masse to color devices and output?
Or how about a survey on the kind of suppliers companies feel comfortable turning to for ECM, or managed IT services, or consulting
services? These are the kind of results I’m interested in seeing. How about you?
“The Hospice Option”
As I’ve often remarked to subscribers of The MFP Report, the editorial page
is typically the last, most challenging and most invigorating part of each issue I write. After more than two decades and
over 260 issues, I wonder occasionally if I’ve exhausted the list of available topics on which to pontificate. To help
allay that anxiety, I keep a folder of possible subjects, tidbits and reminders to inspire me. It’s a simple system
A case in point is an article I put aside during the summer. The title was “Why It Might be ‘Dangerous”
for IBM to Turn Itself Around.” It was written by Daniel Howely, and appeared on the Yahoo Finance news page on July
22. The article was inspired by the fact that IBM four days earlier had announced its 21st consecutive quarterly revenue decline.
But what particularly intrigued me were some quotes from Aswath Damodaran, a professor who teaches corporate finance and valuation
at the Stern School of Business at NYU.
Damodaran was quoted stating the following: “Not all companies last
forever. There is a life cycle to a company. They are born, grow and then decline.” He added that “Trying to force
growth in older companies like IBM could actually have a negative impact on them, because they might end up simply throwing
good money away.” Wow! In what other industry have we seen companies experience years of revenue declines and billions
wasted on misguided strategies to reinvigorate growth? As Damodaran concluded, “When you’re 75, you’d love
to be 35 again, but you’re not going to.”
What was lacking in the article was advice on what geriatric companies
are actually supposed to do when additional investments made in the hope of rejuvenation simply don’t or won’t
pay off. At the risk of sounding tasteless, impractical or even insensitive, I’d like to suggest an option. I call it
Corporate Hospice Care. Absent a competent strategy to regain growth, aging companies in declining industries at some point
will need to come to terms with death. So why not make it easy, dignified, and as painless as possible?
I speak from some experience.
Sort of. In the past four years, I’ve lost two parents and a dear friend to cancer. In each case, we relied on some
form of hospice care. Although the specifics can vary, hospice care is generally an approach that focuses on palliation of
the chronically ill, terminally ill, or seriously ill patient's pain and symptoms, while also attending to the patient’s
emotional needs. In an era in which the law increasingly ascribes personal rights to corporate entities, why not hospice care
Fundamental to the concept of hospice care is the idea that death is just a part of life. At some point,
the focus must shift from remedies and cures, to acceptance and a managed demise. In that context, hospice care for corporate
patients would seem to be a natural and even logical next step consistent with Professor Damodaran’s view that ”Not
all companies last forever.”
It goes without saying the hardcopy companies most vulnerable to terminal print-itis are those
who have the greatest dependence on hardcopy revenue. There’s still a pretty long-list of vendors who obtain roughly
50% or more of their sales from printing: Fujifilm, Epson, Brother, Canon, Ricoh, Konica Minolta, RISO, Xerox and Lexmark.
And the degree of print dependency becomes more disconcerting as one goes down this list. Perhaps ironically, while HP is
certainly a top-tier hardcopy company, printing generated just 36% of its total revenue in FY2017.
This is not to argue that
all of these companies are doomed, or that each faces an equal chance of mortality. But it’s certainly true that past
efforts by Xerox and Lexmark to diversify away from printing have not exactly panned out. Indeed, Xerox, Ricoh, Lexmark and
RISO presently have shared no significant or credible path to lessen their hardcopy dependence, except for some efforts to
grow industrial printing. Conversely, expansion in the medical/biological field by Canon, Konica Minolta and Fujifilm seems
so far to be more promising.
So what might corporate hospice care actually look like? Foremost, it would require acceptance
of a continued downward trend in revenue, quite possibly with an accelerating level of decline after some negative inflection
point. It would also necessitate a laser-like focus on maximizing operating profit. Fortunately, that’s easier in printing
than in many other industries. To accomplish this, one would likely see further slashing of R&D expenditures, even lower
capital investment, reduced headcount, greater outsourcing of manufacturing, and further de facto “outsourcing”
of sales to channels. There’s also something to be said for treating remaining employees with the utmost compassion.
one might argue Xerox, Ricoh and Lexmark are to varying degrees already operating in accordance with such a prescription.
But of course, this kind of trajectory is easier to pursue for private firms than for public companies. Because of that, I
would expect to see one or some hardcopy companies undergo private equity buyouts. Indeed, one might argue it’s more
likely for some print-centric companies to go private than to be acquired by competitors in that oft-predicted final wave
October 2017: “Go Fourth and prosper? … I Hope Not”
As the old saying
goes, “Once is an incident, twice is a coincidence, and three times is a pattern.” So what do you call it when
the same stupid scenario plays out in the hardcopy industry for the fourth time in 15 years? Well, I call it a fiasco.
talking here about the massive financial fraud that’s engulfed Ricoh India and Fuji Xerox New
Zealand (and Australia) in recent months. But lest we forget, these twin disasters
were preceded by the original “Blame It on Brazil” debacle Xerox revealed in 2002 — which actually entailed
problems across Europe, Latin America and Canada — and the “Pain in Spain” mess OKI confessed to in 2012.
These four events clearly evidence a pattern of inattention at best and malfeasance at worst when it comes to basic financial
controls and fundamental management oversight among multiple vendors in governing various overseas sales subsidiaries.
Just to recap,
although none of these disasters alone was life-threatening to the company involved, each was a major mishap with serious
repercussions for the respective vendor. And the implications extended beyond just one territory.
Even after fifteen
years, the Xerox situation remains the mother of all messes. Issues in Brazil and other overseas sales
subsidiaries were at the heart of Xerox being forced in 2002 to restate its revenue for 1997 through 2001 downward by $1.9
billion, with a corresponding $368 million reduction in pretax earnings. Meanwhile, Xerox was dealing with its “unsustainable
business model” and was nearly on the brink of collapse.
Five years later in 2012 — and at the other
end of the printer industry — OKI had to restate its results for the prior six years because of irregularities in Spain. OKI took a hit of nearly $400 million on net income and $100 million on sales.
In contrast, the messes
at Ricoh India and Fuji Xerox New Zealand remain “works
in progress.” Both vendors would like to think all the bad news is out and accounted for, but no one really knows. What
we do know is that between last fall and next spring, Ricoh could end up taking a hit well in excess of a half-billion dollars
to address years of fraud in India. And Fuji Xerox has already taken a $340 million
charge to net income for six years of fraud in Oceania.
a combined total of more than $1.6 billion in reduced earnings just for these four incidents! And that doesn’t include
the consequences of reductions in stock prices, market cap, headcount and sales. What’s so striking is the common themes
I see across these four situations. Despite different eras, vendors and locales, so much of what happened, why it happened,
and how it was handled is strikingly similar.
Consider that in each case, the underlying malfeasance was widespread, long-standing,
and significant in scope. The overstatements to sales and income were so egregious as to very clearly be “too good to
be true.” Yet even when employees raised questions — as they did invariably in each instance — their concerns
were easily and quickly ignored. In effect, the key constituencies in both the local sales companies and the corporate headquarters
were so vested in assuring that the subterfuge continued, it was nearly impossible to recognize the underlying fraud and address
course, one could argue that for each of these vendors, the particular problems were geographically isolated and have not
been repeated ... at least as far as one knows. Indeed, it’s tempting to believe that hardcopy vendors both individually
and collectively have learned the requisite lessons from these past blunders. But one wonders why the first one or two instances
would not already have been sufficiently didactic. So I’m left to ponder. Who’s next? Where? And when?
worry aside for now, there remain far more pressing questions that the hardcopy industry as a whole must consider. From my
perspective, the egregious lapses that transpired at Xerox, then at OKI, next at Ricoh, and then at Fuji Xerox reveal three
First, we’ve witnessed excessive readiness by management to accept unreasonably positive outcomes
as evidence of superior operational performance. Second, we’ve seen a willingness by executives to brush aside uncomfortable
information when it’s conveyed by outsiders, from those in the field, or from those who are lower down in the organization.
And third, we’ve observed how an underlying current of desperation during difficult times can cause leaders in effect
to say “Don’t look a gift horse in the mouth.”
We’ve also seen the same tendencies play out in situations
that didn’t involve fraud but still proved to be very detrimental. Look no further than Xerox’s unwillingness
to confront the big problems in its former BPO business; Lexmark’s failure to realize it was overspending to buy underwhelming
software firms; or the refusal by Dell or Panasonic or other vendors to admit their total irrelevance to the hardcopy industry.
At a time when
the industry and every hardcopy vendor must truly question old assumptions, diversify in uncomfortable new ways, and pursue
change sooner rather than later, it’s time now to consider the lessons from this sordid history.
“Buy, Buy EFI”
Let’s face it. We’re well into the “everybody needs somebody” stage
in the printing industry. Acquisitions and diversification are the name of the game. But consolidation is proceeding at a
glacial pace. Vendors are more interested in businesses that are further afield. That can be good news (Canon and medical)
or bad news (Xerox and BPO). But there’s a much closer-in company that hardcopy vendors are ignoring at their own peril
as possible prey. And that company is EFI.
I’m not putting on my financial advisor hat. I don’t even own one.
But what I am saying is that from a strategic, tactical and competitive point of view, EFI could be a very logical acquisition
for almost any print vendor around today.
Folks who think of EFI mostly as that pricey Fiery supplier for color office and
production MFPs might be surprised to know those RIPs are rapidly declining in importance at EFI. Fiery generated just 27%
of EFI’s revenue in the most recent quarter, and Fiery revenue was flat in the first half of the year versus three years
ago. It’s just that the rest of EFI has been growing so much faster, both organically and from acquisitions.
As a result,
2017 is expected to be the year EFI finally surpasses a billion dollars in revenue. The company now gets twice as much revenue
from its diversified industrial inkjet hardware and supplies business as compared to the Fiery business. The rest of EFI’s
sales are from its vast collection of software used by all sorts of print providers to run their day-to-day operations.
All three of
EFI’s businesses present interesting opportunities for hardcopy companies in the context of a would-be acquisition.
Let’s start with the Fiery business, since it’s the most familiar to MFP vendors. EFI is on track to do around
$250 million in Fiery sales this year. And with a 70% gross margin, the Fiery unit performs more like a software operation
than a hardware business. Not only are Fiery RIPs used by nearly every maker of A3 color MFPs, EFI has gradually expanded
its Fiery sales into the world of digital presses and inkjet devices, not to mention supporting its own diverse industrial
The benefits of a printer vendor taking control of the Fiery business would be twofold. It would cut out
the middleman and some markup, and it would put all competitors at a worrisome disadvantage. And those other vendors couldn’t
simply stop buying Fiery controllers. They have no ready alternatives in the short term, and perhaps not even in the longer
run. Over time, a new owner could even create differentiation between the features in its own Fiery RIPs and those available
to competitors. And a new owner would be ideally positioned to leverage all that Fiery technology for its own industrial printers.
EFI vast and growing array of industrial inkjet and LED printers and supplies. It’s everything from signage and labels,
to textiles and tiles. And it should produce $600 million in sales this year. That’s a lot more than small industrial
digital print competitors like Xeikon, and it’s arguably more than any of the big diversified hardcopy companies are
doing in the industrial market. Adding EFI’s industrial printing revenue would catapult Xerox, Canon, HP or Konica Minolta
to the very top of the industrial print world.
And then there’s EFI’s easier-to-overlook “Productivity
Software” business, which will do around $150 million in sales this year. While this is EFI’s smallest business
by far, it does have the highest margins. More importantly, these tools put EFI in the enviable position of enabling industrial
print providers to go digital, and wedding them to an EFI print ecosystem.
There are also very important but less quantifiable
pluses for EFI as a potential acquisition. Both the company and its management are exceedingly well-known to hardcopy vendors.
Moreover, EFI has demonstrated an effective and reassuringly conservative ability to make one acquisition after another ...
and leverage them. The deals have mostly been small, and all of them were paid in cash. Yet EFI still had $431 million in
cash on June 30. There have been no big failures on the list, and all these deals have helped EFI grow 2.5x in size since
the Great Recession. Talk about reducing the risk in a deal.
Still, EFI remains barely a mid-cap company in a stock market in which
investors like large-cap firms. Moreover, one has to ask how truly disruptive or dominant a company with $1 billion in sales
across three businesses can be in a truly massive industrial printing market transition.
Of course, timing can be everything,
especially since EFI has an awkward history of pretty big swings in its stock price and valuation. For the past five years,
the stock has mostly bounced between $40 and $50. But this year, the stock has careened from a high of $51, to a low of $26.
A day after EFI scared the bejeezus out of investors on August 3, when it warned of revenue recognition issues that turned
out to be nothing, the stock plummeted 45%. That gave EFI a market cap of just $1.2 billion. By the end of September, the
share price was back up, pushing EFI’s valuation to $2 billion. But that’s still below a recent peak of $2.3 billion
back in April.
So who’s gonna open up the checkbook? You?
August 2017: “Healthy Choices”
For very good
reasons, there’s been more than a little handwringing amongst hardcopy vendors, investors, analysts and others when
it comes to figuring out if, when and how these companies will proactively plan for their “next act.” The context
is a printing industry that on an overall basis is slowly declining. Understandably, the concerns are greatest for the largest
vendors and for those vendors who are most dependent on printing for their current revenue and profit.
I, too, have worried that
I don’t see enough of these vendors taking sufficient actions to create new businesses with adequate scale and financial
attributes to offset the decline in printing. Eventually, they’ll have to replace the bulk of what they get from printing.
I see three plausible explanations for these vendors’ slow response.
First, there’s the addictive nature of the
supplies-and-service annuity business model. It’s like asking why a drug addict doesn’t stash away some money
for a rainy day. The second issue is the self-soothing way vendors tend to believe all they need to do is gradually move into
comfortably adjacent markets, whether that’s production and industrial printing, or document management and IT services.
They tell themselves the transition will be natural, comfortable, uneventful. And the third and perhaps biggest roadblock
is a combination of plain old fear and denial, plus a belief there’s still plenty of time to plan.
But the past year has somewhat
surprisingly provided evidence vendors are waking up to the dangers and recognizing new possibilities. And some of them have
decided their “next big thing” will be healthcare. I’m not talking about healthcare as an interesting vertical
in the world of printing, document management or IT. No, I’m talking about horizontal healthcare as in medical equipment,
allied software and services. You know, the kind of healthcare that’s designed to help make people healthy ... or at
In less than a year, we’ve seen two top printing vendors make pretty important acquisitions that
are likely to set them on paths that will make healthcare an increasingly larger and transformative part of their respective
First, we saw Canon complete its $5.6 billion acquisition of Toshiba Medical Systems Corporation (TMSC) late
last year. I’d like to think this reflected a strategic awakening at Canon, but the deal was probably justified as much
or more to help a fellow Japanese corporation in dire financial straits, than to bolster Canon’s long nascent efforts
in diagnostic medical devices. After all, Canon had been talking about expanding further into healthcare for years, while
giving no indication it planned to do anything that was either tangible or timely. However, owning TMSC for just six months
has worked wonders for Canon’s financial results. It can’t be lost on management that TMSC is by far the best
thing that’s happened to Canon’s financial health in quite some time. So look out for even more deals.
Then a few weeks
ago, we saw Konica Minolta announce its billion-dollar purchase of US-based Ambry Genetics. It’s the biggest acquisition
since Konica and Minolta came together in 2003, and the most diversifying as well. Like Canon, Konica Minolta had been talking
about expanding its tiny healthcare business for some time without doing anything much to make that happen. Now, there’s
a good chance Ambry will have the same kind of fortuitous financial impact on Konica Minolta, and prove to be a strategic
catalyst for additional healthcare investments.
And it’s not just these two hardcopy vendors who are making “healthy
choices.” Consider that the company which had been bidding most aggressively against Canon to buy TMSC was none other
than Fujifilm, which owns three-quarters of Fuji Xerox. Like Canon and Konica Minolta, Fujifilm already has a smallish medical
business that it’s looking now to nurture and grow.
Other hardcopy vendors’ plans are more aspirational. Sharp wants
to use its display technologies in the medical field. Kyocera already has a medical and dental division. Xerox PARC is partnering
“to tackle healthcare challenges through collaboration in medical technology, engineering and robotics.” And both
HP and Funai have spoken of leveraging their inkjet technologies for biomedical and pharmaceutical purposes.
lots of technological or even business synergies between printing and healthcare beyond some underlying commonality in optics
and digital imaging. The true impetus has much more to do with growth. Healthcare and allied medical fields will be among
the most dynamic and fast-growing sectors in the global economy in coming decades due to technological momentum and demographic
And I also see a healthy difference in the mindset hardcopy vendors are bringing to this field. In businesses
closer to office and production printing, hardcopy vendors display a distinct sense of unearned entitlement. It’s sort
of “Don’t you know who I am?” But with healthcare and medical technology being so much further afield and
also exceptionally dynamic, these vendors seem to sense they’ll actually have to earn everything they want. And that’s
a healthy choice.
July 2017: “Sure, We Can Do That”
Sometimes we Southern
Californians take for granted the inherent differences that come with living on the Left Coast, like year-round sunshine, great ethnic food, and day laborers. That last one refers
to the couple dozen immigrant workers in any Home Depot parking lot every day of the year. They’re new to the country
or down on their luck, and are willing to help with almost any task for a reasonable cash payment. It’s sort of like
the work I used to do as a kid for my dad ... except there was no cash payment.
I’m starting to see the
makings of an analogous trend in the US office MFP business. It’s too soon to say if this development
has legs, but it’s worth a look ... and some cautionary advice. What I’m talking about are a couple of recent
announcements from Ricoh and Konica Minolta. They’re about how both companies want to leverage their MFP service people
and infrastructure to pursue opportunities in new, not necessarily adjacent markets. My concern is that these initiatives
are very simplistic and not terribly sound.
In May, Ricoh announced Service Advantage, which it described as a “substantial
addition to its services suite.” The mission is “to help businesses accelerate their core strengths” and
“enable a significant competitive advantage.” To do this, Ricoh is offering a wide range of businesses access
to its global network of 25,000 skilled and certified service employees. Ricoh says they possess “extensive market knowledge
and distribution networks” and “understand the business conduct and laws” in 200 countries and regions.
boasts that its MFP service techs can provide “cradle-to-cradle” services. That’s not babysitting, although
I’m sure Ricoh would do that too for the right price. It’s just another bit of undefined industry argot. Ricoh
touts its expertise in device lifecycle management, distribution, installation, maintenance, training, and physical asset
retirement. But Ricoh never really pins down what exactly any of these services are; how many or what kinds of employees provide
the services; or any options for service delivery.
Then in June, Konica Minolta announced it is investing up to $3 million
in Knightscope, a Silicon Valley maker of security robots. This follows a small initial investment in
2014. It’s the rationale that’s interesting. The focus isn’t on robotics technology or the security market.
Rather, it’s “to leverage Konica Minolta’s service technicians.”
The common thread in what
Ricoh and Konica Minolta have announced is a parallel quest to find new things for MFP service technicians to do. When you
break it down, the message is really pretty simple: “We have lots of service techs who do lots of stuff, so why
not let them do stuff for you?” We’re not talking here about MFP vendors advising other companies on service infrastructure
design, field service systems or software, or best service practices. This is about providing MFP service tech bodies and
hours far and wide so that other companies don’t have to hire, train, deploy and maintain service techs of their own.
This type of
offering is new in the MFP world, but the practice has a long history in the IT market. Today, field service outsourcing is
just another link in the booming logistics support and supply chain management business. In some cases, it’s closely
intertwined with IT outsourcing.
Now for the cautionary advice. Look back to the early days of field service outsourcing in
IT in the 1980s, and see who was doing it. And why. I stumbled across a “leaders” list IDC had prepared over 30
years ago. It’s a veritable who’s who of old, largely forgotten mini and mainframe companies like DEC, Prime,
Data General, Tandem, Wang, Burroughs, Microdata, Basic Four, etc.
Now think back to what else was happening in the ‘80s.
The PC market was exploding, and these mini and mainframe computer companies were getting slammed. They too had lots of service
techs and were looking for a new way (or any way) to make money. Does this sound at all familiar? Nearly all of them got into
field service outsourcing, and it was a decent business ... for a while. But it wasn’t enough to help most survive.
In fact, only a few in that business managed to hang on (e.g., IBM, HP, Unisys, Honeywell), and none of them still do field
So this early interest among two MFP vendors who want to leverage thousands of service techs warrants
some critical thought. Let’s start with the most fundamental question. Either these vendors have too many service techs;
or they think their techs can easily take on totally new tasks; or they’re expanding their service forces to gain new
outsourcing work and customers. I have concerns with each of these scenarios.
MFP service needs are declining, which means fewer
techs. If a vendor has too many techs, downsizing is the prudent choice. However, if the idea is to build an outsourced service
business, then the economics, competitive dynamics, prospects, and business model for that endeavor deserve a harder look.
Field service outsourcing faces a lot of pressure on pricing, margins and profits. And the barriers to entry are hardly insurmountable.
Ask Xerox about its experience with complementary services. Just because a vendor can stretch the services it offers, does
that mean it should?
June 2017: “Zis-Boom-Blah”
It’s been quite a while since
I’ve editorialized about what it’s like to be a print industry analyst. The last time was back in September 2010
(“That Raised Eyebrow”). Then, the introspection had been brought on by the untimely death of a dear colleague.
As I stated at the time, “No one likes to defend what he does for a living, least of all an analyst who’s accustomed
to examining others.” I also emphasized the value of “inherent and inerrant skepticism.” As I said, “To
be a thoughtful and well-grounded skeptic is the epitome of what it means to be a strong analyst.” I still stand by
But much has changed since then in printing, and more generally in the way people today look at news and unvarnished
analysis. In our own industry, too many vendors now act as if all they need to do is string together trendy argot and add
a few aspirational “change the world of work” statements. They equate those modest efforts with actually delivering
tangible news. And they look daggers at anyone who doesn’t drink their hardcopy Kool-Aid. For some vendors, any contrary
assessment that an analyst or a member of the press publishes is treated as if it were “fake news” and a deep
Here’s a case in point. I was recently admonished quite harshly by a vendor for certain statements
I had published months earlier about that company. The vendor complained long after my words had appeared. Only now was I
being told those words “were not necessarily interpreted as a token of trust or an interest in building a good relationship.”
If I knew it were a date, I would have brought flowers. I won’t say who the vendor is as THAT wouldn’t really
be newsworthy. In this instance, I choose to side with Shakespeare’s Henry IV. “The better part of valor is discretion.”
And that wasn’t
the worst of it. This wasn’t a case in which the vendor actually disagreed with my assessment. Indeed, the vendor had
long ago made very clear in a phone call that it agreed with me completely. During the call, the vendor had told me other
analysts and press people shared the same perspective. But now, many months after the fact, I was informed the real problem
was that I had had the temerity to express my views publicly and in writing. Quelle horreur! I was to be punished because
my feedback shouldn’t ever have gone beyond our call.
I’m not one to let sleeping dogs lie — especially not when
there’s an opportunity to enlighten and to be snarky all at the same time. Indeed, one of the few perks of publishing
is getting to have the last word. So, I asked this vendor a simple but telling question. Was his company equally offended
and morally pained when on several occasions since that fateful commentary I had dared to put in print certain genuinely positive
and occasionally even glowing assessments of other things the same company had done. The response? ... nothing but crickets.
precisely my point. I’m not here to be a cheerleader. I don’t do rah-rah. Not for any vendor, not for the industry,
not for a product category, not for a technology, not for a particular channel, not for any program. Nor am I here to serve
as a mere conduit. You know. You put your carefully crafted “news” in one end, and wait to see it pop out from
the other end. Nope. Not gonna do it.
Reasonable vendors and responsible executives have to understand they can’t have negative
feedback shared quietly behind the scenes, with only positive feedback deemed suitable for publishing.
In the abstract, I believe
most vendors agree with me ... most of the time. And all vendor certainly agree with me all of the time, as long as my critiques
are focused on their competitors, or they relate to a segment of the industry in which they don’t participate.
But as soon
as I call YOUR baby ugly, all hell breaks loose. And as often as not, it’s not really that your baby is ugly. It’s
just that you’re marketing and ability to communicate are lacking. You’ve failed to convey sufficient content
and enough context in order to persuade and enlighten me. And as I always tell vendors, if you can’t convince me, when
I’m devoting time and effort to understand what you’re saying, how are you ever going to use that same approach
to win over customers or partners? I’m you’re off-Broadway, out-of-town reviewer. Think ahead about how I’m
going to react, take to heart what I say, and act accordingly. It’s the things no one else bothers to tell you that
will really hurt you.
I understand vendors and their employees aren’t dumb or lazy or uncaring. And I know every company
is under pressure to do more with less and do it faster. But no other important constituency cares enough to dissect what
I’m not going to change. I’m too old and cranky, and I’m way too cynical to move toward
lighter and brighter. I’m gonna keep saying things — sometimes mean and hurtful things. I’ll criticize you
when I understand you, but I don’t agree with you. I’ll explain why I don’t agree. Then you decide if you
disagree with me. You’re free (even encouraged) to pick apart my rationale for disagreeing. Whether you share that with
me isn’t the point. It will make you a better vendor. It’s the circle of life ... or at least it’s how I
think life should be for an industry analyst like me. Rah!.
May 2017: “In Search of Goldilocks”
There are some
big similarities between where hardcopy vendors should look to go from here, and the ongoing quest by astronomers to locate
habitable planets somewhere out in the universe. MFP industry executives and stargazers alike are focused on identifying what’s
known as the “Goldilocks Zone” — not too near and not too far, not too hot and not too cold. Everyone is
anxiously seeking a new place that’s just right.
In astronomy, that means pursuing rocky planets in the so-called habitable
zone. They’re not too big or small and not too close or far from their star. Temperature and atmospheric pressure there
coincide to maintain liquid surface water.
And in the hardcopy universe, logic and experience prescribe an equally narrow
habitable zone. Those new business opportunities must lie adjacent to the company’s current print technology or leverage
its current business practices. And that basically points toward two options.
A vendor can use its inkjet technology to move
into industrial printing. It can be anything, from labels and packaging, to signage and wall coverings, to textiles and ceramics,
and even additive manufacturing. Because high-speed, high-quality inkjet printing is a complex and narrowly held technology,
there are pretty good barriers to entry. And one also shouldn’t underestimate the comfort factor for vendors who want
to stay in the “printing” business. So it’s not surprising that industrial inkjet printing is becoming the
preferred path. But there’s not room for everyone.
The alternative is to make the big leap from managed print services in
the office, to a more broadly — but not too broad or distant — set of services for workflow, business process
improvement, or managed IT. While demand exists for all of these varied kinds of services, the risks are pretty high when
expanding into these new arenas. Above all, one can’t just ignore all the competitors who didn’t come from the
hardcopy world, as MFP vendors have been wont to do.
And just as astronomers have found that being even a little bit outside
the Goldilocks Zone has profound implications for the chances of life to exist, so too do the odds of business success appear
to dissipate rapidly the further vendors in our industry stray from their core business.
For better or worse, the experiences
over the past half-decade at Xerox with BPO services and at Lexmark with ECM software have closed the doors on areas that
initially had seemed quite reasonable to pursue. It doesn’t matter now if one argues the real problem was Xerox’s
or Lexmark’s management, the companies they acquired, or the prices they paid. No reasonable investor or lender is ever
going to fund a repeat.
Even if one puts aside these two particular failed efforts to buy one’s way into a diversified future,
there are other examples playing out among top hardcopy companies today that have nothing to do with recent acquisitions.
And what they show is that different is not always synonymous with better. Look no further than HP’s ordeals in the
PC market, or Canon’s huge problems with cameras, or even the obstacles confronting Toshiba TEC in the POS business.
Not only is each of these product domains fraught with challenges, they all have much worse profitability than the hardcopy
Yes, I know it’s easier for me to cajole, caution and criticize vendors than it is for those companies who
are dependent on the printing business to make such a huge leap. At the same time, I just don’t see a lot of other options.
Most vendors who choose not to move toward industrial printing or a broader services portfolio are left only with different
versions of what amounts to giving up.
Sure, a weak or small printing vendor can try to sell itself to a larger or stronger
one. But this is really just doubling down on print. One better hope the buyer is doing a better job planning for the future
than the seller did. Yet this is also the most likely outcome for several vendors today.
Or a vendor may be able to sell itself
to an investment firm in what amounts to nothing more than a financial transaction devoid of interest in technology or products.
The buyer will gut R&D; slash administrative and operational costs; perhaps undercut the competition on price; suck off
the profits for five or so years in order to make the deal pay off; and then let the doors close.
Or a vendor might try to
find some IT-oriented buyer who sees value in a high-touch direct and indirect B2B sales and support operation. Perhaps a
printer company can be rejiggered and redeployed in another product or services domain. But such buyers are bound to be few.
And given the high degree of risk, the price a vendor would obtain in such a deal is likely to be low.
The only other option is
really nothing more than the default choice. It’s a non-decision decision to stay the course. No vendor is ever going
to admit that’s the plan. But the financial results we’re seeing today tend to indicate this is indeed what’s
happening inside many firms. They’re still talking about change and transformation and plans and finally “getting
it.” But they’re really just hoping for a very gentle decline in the printing business over an extended period
of time — preferably until management is able to retire.
April 2017: “Easy, Breezy,
Beautiful ... And Altogether Inadequate”
When assessing an MFP product launch, I often tell vendors my simple rule
of thumb. If I - an experienced and admittedly compulsive analyst - have a hard time finding a reasonable level of detail
on your products, what does that mean for customers who have far better things to do with their time?
Based on what I've experienced
over the past couple of months, there's been a definite downward trend in what vendors seem able or willing to provide.
I'm left to conclude there's a concerted effort among the industry's leading companies to obfuscate when it comes
to their new products. Tell me. How is this supposed to help sales?
The latest examples I've encountered are quite literally
the biggest MFP vendor announcements in recent memory: HP's massive new A3 product launch; Epson's pagewidth inkjet
A3 device news; Xerox's big WorkCentre-to-AltaLink upgrade; and Konica Minolta's Workplace Hub debut. In each case,
the announcement and the follow-through have been sadly subpar, to the point where I wonder if many customers will even bother
trying to figure out what's going on.
There have to be some common reasons for the consistent bungling and missed opportunities.
It's not a coincidence. So here's my take on the top seven causes - and by implication the remedies - for these major
Consumerization. Bringing consumer products and technologies into business isn't a bad thing, but
the misapplication of consumer marketing norms does a huge disservice to the office MFP industry. What I call the CoverGirl
approach - easy, breezy, beautiful - has unfortunately become all too common in the business IT world. The focus has shifted
to flavor, feeling and fluff at the expense of facts and functionality. Connect the damn dots! It's not a marketing win
when an analyst or would-be customer listens to your big pitch and walks away thinking, "That's nice, but what is
it this company's really delivering?"
The Two-Step. In each of the examples I cited, the vendor opted for
a big emphasis on the pre-shipment launch and a much more vague postpartum promise that the details would follow. But just
as in Hollywood, a sequel is never as good as the original. There can certainly be good reasons for
announcing products months prior to their availability. But those reasons should never include a desire to delay final collateral,
setting prices, determining messages, and fine-tuning everything else. Vendors have to be able to maintain a sense of urgency,
even after the excitement of the pre-announcement fades.
The Big Picture. Somehow office imaging companies has convinced
themselves their mission is only to solve their customers' absolute biggest problems. It's all about security and
workflow and mobility and content and cloud and happiness and world peace and on and on. As a result, it doesn't seem
to occur to vendors any longer that they still have to excel at the basics, like speeds, features, options, economics, configurations.
It's clarity on the details that enables buyers to accept those loftier promises.
Doubt. I'm convinced a lot
of the dysfunctional marketing I see these days around MFP product announcements can be traced back a fundamental but uncomfortable
truth. Vendors don't really believe their own hype any more. It comes down either to believing more or hyping less. I'm
convinced the best way to bridge the gap is for vendors to do a better job providing details and explaining features that
deliver real upside to customers. And that includes those pesky pecuniary facts called prices!
Ennui. This is the French
word for boredom. But it connotes more than that ... a certain weariness, fatigue and apathy with a whiff of wistfulness and
a soupcon of sadness. Increasingly, I think the lack of depth and completeness in MFP announcements can be attributed to vendors
who deep down believe there's really nothing new, interesting, important or different in what they're bringing to
market. And all that fosters a certain laxity when it comes to satisfying the basic requirements of marketing. Meanwhile,
I suspect vendors tell themselves it's really about a lack of resources and too few personnel.
Buck-Passing. All too often
too many vendors behave as if there's some other group down the line that will compensate for their own marketing shortcomings.
Offshore vendors look to their regional sales companies to do the job; marketing pushes the task onto sales; and vendors assume
channel partners will pick up the slack. But too often, the buck stops before it gets there.
Paranoia. Implicit in some of
the reluctance among vendors to perform what used to be considered marketing basics is an irrational fear that such information
"will only help my competitors." News flash! ... Your competitors already know this stuff or they will very soon,
regardless of what you do or don't do. So does it really make sense to hobble the ability of your customers and prospects
(and analysts and press) to fully appreciate what you've got out of some misguided hope you're impeding competitors?
As the saying
goes, "You only get one chance to make a first impression." So stop screwing it up!
March 2017: “Are These the Good Old Days?”
I’m not one who recalls lots of famous
lines from TV shows or movies and sprinkles them in my conversation. However, there’s a line from the 2013 finale of
The Office — the US version — that’s particularly apropos to one segment of the MFP
business today. It’s when Andy Bernard laments, "I wish there was a way to know you're in the good old days
before you've actually left them."
No, I haven’t gone all sappy. Hardcopy today is far from “rainbows
and unicorns,” but it’s dawned on me that we’re on the cusp of what can legitimately be looked at as “the
golden age of desktop MFPs.” To clarify, I’m talking about economical A4 laser or LED color and monochrome MFPs
sold in open channels. And it’s more about what users get from these “low-end” MFPs than any claim these
products are creating the best of times financially for those who make them.
To see what I mean, look no further than some
of the products noted in this issue, particularly the color devices: Canon’s new imageCLASS models; Brother’s
latest MFC series; and Xerox’s first VersaLink MFPs. HP is no slouch in this category either, but these latest products
are now a step ahead. Lexmark also remains a contender, but one with some issues. You might put OKI in this category, too,
although less so when it comes to scale and viability. And with the imminent departure of Samsung-designed MFPs in this segment,
that’s pretty much it. Six vendors in a market that can probably support three or four with a reasonable degree of success.
relative terms, the A4 side of the MFP business is where the unit volume and sales growth are to be found these days, especially
for color devices. Meanwhile, we’re seeing most traditional A3 vendors pretty much give up on true A4 innovation and
promotion. They’ve concluded — probably correctly — there’s no way to be an A4 evangelist without
exacerbating already tenuous sales trends in the more lucrative A3 side of the business. Is it any wonder just two vendors
(Lexmark and Kyocera) offer today’s only fully credible A3 replacement-type A4 models?
But forget about the vendor
side of the equation for a moment. Instead, look at what customers get from the latest crop of mostly sub-$1,000 A4 laser
MFPs ... which they can buy instantly at dozens of places online, have UPS or FedEx deliver to their door, and be using tomorrow.
As much as the
industry has come to denigrate ”speeds and feeds,” who doesn’t like faster better than slower? Today’s
latest desktop MFPs offer color speeds in the range of 30-55 ppm and some monochrome models are up to 65 ppm. Nor is it just
output speed. New single-pass duplex document feeders are enabling image capture at 20 ipm on up to 60 ipm on most models.
are at last getting serious about paper-handling. Not only is duplex a given for both input and output, a paper supply north
of 1,000 sheets is hardly unusual. Even though most engines are still front-facing printer designs, today’s new machines
are compact and require modest space. They’re easy to fit almost anywhere and relocate as needed.
Arguably the greatest progress
has been in usability. No longer are big touchscreens limited to pricey A3 devices and consumer AIOs. Color touchscreens
on new laser MFPs measure up to 7”, and vendors are enabling tablet-style gestures and features. These enhanced UI’s
are providing the basis for more powerful customization and personalization, user-defined workflows, downloadable apps, and
simple but powerful solutions. Likewise, vendors are providing more and better tools for device management and MPS.
aren’t yet getting enough credit for how they’re quietly but significantly bringing down page costs, albeit from
levels that used to be downright embarrassing. There’s still more room for improvement on color pages, but monochrome
costs are now pretty attractive. Across the board, vendors are offering more toner choices, and many of the new cartridges
have unprecedented high yields. And keep in mind, these savings come without restricted access to supplies and without any
need for a service contract ... unless that’s what one wants.
So what are the missing pieces? A few things come to mind,
but I’d categorize them as making a good thing even better. On the product side, simple finishers would be a nice plus.
That would be facilitated by the addition of more sideways print engines. And I’m still holding out hope for more A3-capable
A4 products like Ricoh’s easy-to-overlook (apparently even for them) monochrome MP305 Plus. And we’re still lacking
a toner program like HP’s Instant Ink. HP piloted a “professional” version of its inkjet supplies replenishment
program in 2014, but nothing came of it. And while other vendors offer automated toner shipment programs, none yet has the
simplicity or economy of Instant Ink.
Nonetheless, as these final improvements begin to hit the market — as they undoubtedly
will — they’ll quell some of the last blanket arguments in favor of A3 models for lots of SMB customers and for
many enterprise workgroups. But even without additional improvements, you still won’t find a more robust and innovative
MFP segment today than the A4 desktop business. So enjoy it.