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This
Month's Spectrum Summary:
(The
following is an excerpt from the August 2007 issue of Spectrum,
a
proprietary monthly briefing published exclusively for the
clients of I.T. Strategies, Inc. © 2007)
Shanghai
Wide Format Expo Perspectives-
Progress: More UV, Upgraded Performance;
Challenges: Growing Distributor and User Backlash
This month we meet with I.T. Strategies
analyst Liz Ziepniewski for a report on the APPPEXPO 2007
in Shanghai. The show unveiled many interesting products and
players in the volatile wide format printer market. The session
also stirs up some provocative perspectives with relevance
beyond just wide format.
One interesting thing at the show was
the number of new UV products.One
motivation is the need to do better in overseas markets that
require higher print quality and environmental standards.
The print quality issue is also driving a strong shift from
Xaar heads toward Spectra and KonicaMinolta. Success with
UV printers may also help the vendors overcome severe hardware
price erosion via that all-important ink annuity.
Machine reliability problems have been
plaguing overseas users of Chinese wide format for years,
with some now moving to higher cost machines from companies
such as NUR and VUTEk. Besides reliability, overseas demand
may also be negatively impacted by news of quality control
problems with other Chinese exports such as pet food and children's
toys. The wide format segment, like others, is built on the
cheap labor model that tends to be still working in the domestic
market. But this also faces challenges including tough competition
among the vendors and a skilled labor force rebelling about
pay and working conditions.
Overseas markets to date represent
perhaps only 20% of their wide format sales. We discuss distribution
and this, in most of their overseas markets, is through distributors.
Their distributors, like many users, are unhappy with reliability
and other issues. But they do gain know-how that may help
them move up-market. Sun in Russia is a prime example. Sun
has developed its own product, using innovative LED technology,
the NEO UV-LED printer. Liz says this was one of the highlights
of the China show. Another example of a dealer moving up-market
is Belgium-based Augend Technologies, now offering several
of their own wide format printers. In short, China may be
seeding the world through its dealer partners.
Outsourcing to China by the mainstream
vendors can work the other way. Although perhaps behind Russia
and India, China's high-tech resources are growing rapidly
in part as a by-product of supplier relationships with mainstream
vendors. In time this could help China escape the challenges
that impressed Liz at the Shanghai show. Success, after all,
is a process of overcoming problems. Recognizing problems
is an essential early step. So our tendency today to mull
the problems should not be interpreted as a death sentence
for China's wide format vendors.
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