This Month's Spectrum Summary:

(The following is an excerpt from the June 2006 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2006)

$1 Trillion Up for Grabs?
Film Giants See Themselves as the Bridge

Fujifilm's recent acquisition of Dimatix/Spectrum prompts Mark Hanley and Marco Boer to focus this month's roundtable on the larger significance. To overview the digital status of the whole industry Marco divides the printing world into the following 4 groups: mainstream analog (Offset); two major photo film companies and one former one, i.e. Agfa, make up the second group (Digital Prepress); the major digital vendors (Tier 1); and other digital vendors (Tier 2). Looking at the positioning of these companies holds lessons that can be helpful to everyone in the industry.

The three film-oriented companies can be viewed as a bridge, a link between the analog world and the digital world. Marco breaks out their volume four ways: offset, digital prepress, direct digital electrophotography (EP), and direct digital inkjet (IJ). This highlights the reality that from the standpoint of the three film-oriented vendors, they are already heavily into digital. And on top of that, unlike other digital vendors, their customer base has them already plugged deeply into the commercial printing world.

Regarding their status and prospects, we are reminded that it boils down to time and money, and that all three have the money at this point, but maybe not the time to complete the transition to digital and grab analog volume. When time is short, acquisitions can speed things up and we are reminded that Kodak has acquired five or six digital companies in the past two years. Fujifilm has been slower, but in just the past year has made three acquisitions. Agfa began moving in this direction much earlier, acquiring Compugraphic in 1982 and discontinuing its camera and film business.

These moves by the film companies look like clues regarding the future of EP vs. IJ. Inkjet is seen by many as the gateway to replacing more and more offset volume. Although the investments in EP to date have been much larger than IJ, this now is changing. The core expertise of these companies is chemistry and chemistry is key to advancing inkjet technology and revenue stream. Inkjet may have the greatest potential over the long run to supplement and ultimately replace analog printing. It is a wave that potentially can carry everyone.