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Office Equipment Market Talk: Consolidation Brings Focus on Service Provision

Rivals seem phlegmatic about the HP-Samsung deal in the printing segment, with little market turbulence expected. Most players say they will focus on R&D and boosting their own service portfolio to keep ahead of competition.

Ferenc Kustos, Ricoh Hungary.

Although the news first broke back in 2016 that HP would buy out Samsung Electronics’ printer business, the deal itself was finally approved only in late 2017.
With the grace period over, market players now need to face all the consequences of the acquisition.
As a press statement sent by HP Magyarország to the Budapest Business Journal explains, HP’s solid sales network and customer management scheme in printing is thereby complemented by the technology expertise of Samsung in the field of copying. The deal, therefore, catapults HP into a comfortable position in the copying segment as well.
The USD 1.05 billion purchase can also be interpreted as part of a larger-scale strategy, since HP’s declared goal is to do the same in office equipment as Tesla did in auto manufacturing. Accordingly, the main focus is dedicated to the development and implementation of printing management software as well as cyber-security solutions.
The acquisition was evaluated as market cleansing by Canon Hungária due to the consequential decrease of players. On the other hand, it expects a substantial impact on the market of small laser printers, where Samsung had had traditionally strong positions. HP will also need to gear up to fulfill more complex customer needs as a result.

Focus on R&D

Ricoh Hungary says it has taken note of the deal, but would rather focus on its own matters, most importantly its R&D activities, to handle the new market situation. On the other hand, when asked about what role services play in generating revenue, Ferenc Kustos, director of trade and marketing says that there is a long way to go to reach Western European ratios.
 “We are not talking about operation and maintenance services here, but rather a wide range of others such as document management systems, auxiliary software or outsourcing different activities,” he says. “Demand for such services in Hungary does exist; however, it takes out-of-the-box thinking to actually make it part of everyday operations.”
Kustos mentions the example of the company’s cooperation with AXA Bank in Belgium, where all inbound and outbound documents travel through a Ricoh workflow system. Hungarian customers seem to be a long way off from thinking that big.
Canon Hungária confirms that printing-related services carve out an increasingly large portion of its revenue pie. “In the world of digital transformation, there is ever more demand for safe, fast and precise digitalization, archiving and process management,” it tells the BBJ.
But what about customer preferences in terms of purchase or renting? In the experience of Canon Hungária, renting office equipment is widely popular, irrespective of company size. Using second-hand equipment is typical for small enterprises that have limited financial means and are just about to undergo digital transformation. As a manufacturer, Canon says it doesn’t have enough information to evaluate the used devices segment, though, as its focus remains on selling and renting out new machines.
By contrast, Ricoh Hungary is very much familiar with the used segment. In fact, it deals with large volumes of used office equipment that tend to stem from its operations in Austria. Following a full renewal, such devices land on the market in Hungary for around 30-40% of the purchase price of new ones.
“It works pretty much like the used car market. Many players import items from Western Europe, often with questionable product history, though. We at Ricoh make sure that we only deal with products that have not surpassed 30% of their life span,” Kustos says.

Trending now in Office Equipment

Several novelties are out there to attract corporate customer attention in the office equipment arena. Canon’s total portfolio has been fully updated after the addition of new security functions and the introduction of cloud compatibility. More importantly, it says its projectors offer more than ever thanks to lighter and smaller structures. The wireless range to transmit signals to projectors from mobile devices has also been increased, while the latest models offer an unprecedented 20,000 hours without maintenance. Ricoh, in turn, is betting on a solution where multifunctional printers are accompanied by Android tablets. This allows customers to download and use the most recent apps available at all times, making sure that workflow management is always driven by the most cutting-edge tech. Ricoh also has a solution by which up to five pages can be pressed together without using staples. HP, on the other hand, says it aims to shake up the A3 market. It says its so-called “Pagewide” tech makes the efficiency difference between black-and-white and color printing history.

Hungarian SMEs’ Printing Habits

According to a 2017 Canon Hungária survey, local SMEs don’t tend to keep track of how much is printed on their premises. The bigger the size of the company, the more conscious the practice becomes. However, only one-third of those companies that do keep count of the number of printed pages make it obligatory for staff to identify themselves with access cards when using a printer. As far as volume is concerned, around half of those polled reported they had used the same amount of paper for printing as in previous years; 17% said they print more, while 28% said they print less. A great majority of companies, namely 86%, try to cut paper use for printing purposes. Some 70% of them do so by replacing printing with scanning. Around the same portion of polled firms use the reverse page of sheets that already have something printed on one side. The survey also revealed that almost 60% of respondents don’t use any document management system, which could be a large niche market for the future.