This Month's Spectrum Summary:

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

The Competitive Stage Shifts
from Tweaking Technologies to Battling for Eyeballs

This month we have Marco Boer outlining the current status of the EP (electrophotography) market, the product segment expected to enter an exciting wave of growth, and strategies for riding that wave. Three general segments are identified, high end digital color presses, mid-range copier/printers, and desktop laser printers. Currently there is slow, steady growth in each of these segments. The major new opportunity is converting the mid-range, mono copier users to color copiers/printers. With current products maturing and third party vendors competing for toner, the very survival of monochrome EP is in question given growing user hunger for color.

Looking at the numbers, we see that the desktops are growing the fastest and also offer the highest per-page revenue. But there are down cycles in any segment, so it makes sense to work at least two of the segments and most current vendors are doing this, a way of hedging their bets and amortizing the huge R&D investment needed to launch a new generation of products.

Sustaining growth, or better yet increasing market share, requires attention to applications, marketing strategies and costs, margins, brand strength-all tools for market access. Each is a moving target. Direct marketing continues to be viable only for digital presses. Other products were formerly marketed primarily through office products distributors and dealers but with eroding margins, these have mostly disappeared. Two major alternatives now at the low end are the mass merchandisers such as Staples and Office Max, and direct online sales by the manufacturers themselves.

In this new distribution environment, brand recognition becomes ever more important. This means it can be a "battle for eyeballs." Weapons include advertising and buying your way into mass retail. Many retail chains rent shelf space to vendors looking for high visibility to shoppers. Such market access programs can be expensive but essential. As technology matures, it can join or even replace technology and R&D as a major cost center. Some vendors, in fact, IBM for example, have phased out manufacturing in these EP segments, concentrating on market access instead. As technology matures, it shrinks in importance as a competitive asset and market access strategy becomes ever more important.