Scanners and Copiers

Scanners and copiers represent a golden opportunity for Middle East channel partners looking to expand their portfolio

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By  Andy Tillett Published  August 21, 2005

Soaring sales |~|scanner.gif|~|Gartner reckon that the market for page copier, printer and flatbed multi function products (MFPs) in Europe, the Middle East and Africa (EMEA) will grow by 7% in 2005|~|Resellers can make 15% margins and sell hundreds of units in just one deal at the high-end of the copying and scanning market, and the major vendors are queuing up to build relationships with quality resellers from across the Middle East. We're still a long way from the paperless office environment then, and the scanning and copying market continues to thrive across the region. The analyst team over at Gartner reckon that the market for page copier, printer and flatbed multi function products (MFPs) in Europe, the Middle East and Africa (EMEA) will grow by 7% in 2005, with shipments totalling a mammoth 11.65 million units. Scanners continue to sell by the bucket load, offering better resolution and sharper colours to both businesses and consumers at price points that continue to push lower. While the rise of the multifunction product (MFP) has had an impact on the sale of standalone products specifically designed for either copying or scanning, sales of high-end devices have more than compensated for any slowdown in specific market segments. “Although scanner unit sales have been flat, the revenues from this segment have actually increased 20% year-on-year, suggesting more sales being made at the mid-range to high-end of the market,” explains Thomas Valjak, category manager imaging and printing group at HP. Vendors typically split the scanner market into three market segments: low-end entry-level volume products; high-resolution scanners for graphics and design houses, and specialised rapid scanning devices sold as part of document management solutions. Down at the low-end, MFPs have started to make inroads into the traditional home market for scanners. In an environment where physical space is often at a premium and aesthetics take priority, end-users are increasingly turning to MFPs as opposed to separate scanning, copying, faxing and printing devices. ||**||Rise of the MFP|~|valjak.gif|~|Thomas Valjak, category manager imaging and printing group at HP|~|“Printers are now providing the capabilities one would expect from a scanner, copier and a fax. MFPs now integrate memory card readers and PictBridge technology for printing directly from cameras without PCs. These technologies are also eliminating the need for scanners,” comments Abdulrahman Almoayed, manager printing solutions and services division at Lexmark Middle East. The standalone low-end scanner has moved through the product lifecycle and is now very much a commodity item. Vendors such as BenQ and Canon reckon that the margins on low-end scanners and entry level MFPs typically sit between 5% and 10%. With scanners retailing for as little as US$100, this is a low-margin where the economies of scale offered by hypermarkets and power retailers come into play, squeezing the space left for resellers to operate in. “For BenQ, the standalone scanner market is dropping. It’s not a significant drop but every quarter the MFP takes over a little bit more. One piece of equipment now does three jobs for only 40% more than the cost of a standard printer,” says Raj Kumar, product manager at BenQ Middle East and Africa. The rise of the MFP has created a market where vendors from a variety of backgrounds — be it scanning, copying, faxing or printing — are all being forced to converge on one specific product segment. BenQ has released two MFP models during the first half of 2005 in the UAE and Saudi Arabia aimed at the home user sector. BenQ hopes to shift 30,000 MFP units a year in the Middle East. While standalone scanners are feeling the pressure from the all-singing all-dancing MFPs available in the market, no one is sounding a death knell for the product segment just yet. BenQ continues to manufacture scanners, despite its forays into the MFP world. HP continues to produce significant sales volume in the standalone scanner segment as well. Some vendors attribute the sector’s resilience to the variation in spending power that continues to exist in the Middle East. ||**||Evolving market|~|Zeidan.gif|~|Ahmed Zeidan, technical support manager at Epson Middle East|~|“A large proportion of the people buying IT products are from low income backgrounds. They are more likely to buy a computer, then follow this up with the purchase of a printer and then after that a scanner,” says Ahmed Zeidan, technical support manager at Epson Middle East. “People are still buying and using scanners because they find they have a backlog of older images or photos that they want to scan. We have even introduced new models with features to specifically scan photos and slides,” says Valjak at HP. Both are valid points, but for many channel players, the future is centred around the increasing prominence of MFPs. Novin Joseph from Dubai-based distributor Utmost Electronics sees demand for MFPs outstripping ordinary printing and scanning solutions by a long way. “We had to introduce the MFP because of the demand. To survive, you have to follow the market. We are making revenues of around US$11,000 a month on printers, scanners and copiers and we don’t want to lose out because we’re not keeping up with the technology trends,” comments Joseph. ||**||Climbing the value add ladder|~|Zubair.gif|~|Shihab Zubair, product manager large format printers at Almoe|~|To maintain margin in the scanner segment, resellers have to climb the value-add ladder and move into the specialised areas of the market. In the graphics market, Almoe, the exclusive large format and high specification scanner distributor for Epson in the UAE, has built up a solid business selling high-resolution scanners. These scanners make an excellent complementary sale to large format printers. “We sell a lot of the high-end scanners with the large format printers. Most of them go to photographers, advertising agencies and there is also a growing market among medical staff for high quality printers used for x-rays,” says Shihab Zubair, product manager large format printers at Almoe. Although unit sales are limited to two or three a month at most, margins of 15% plus on an item that costs around US$7,500 is still pretty good business. High-end scanners are typically a direct sale made by specialist resellers able to provide solutions that also cover the printing needs of clients, according to Zubair. Scanners also show strong margin potential when sold as part of a wider document management solution. Imaging and printing vendor powerhouse Xerox claims that document management is one of the three pillars of its printing solutions portfolio. “You need to have the right partners that can go to your customers and talk about document management solutions. In this region our partners are gaining confidence and starting to look at applications and actual projects as opposed to just trying to sell boxes,” says Dan Smith, product manager distributor operations at Xerox International. Selling scanners as part of a solution for document management has wide implications, involving both software and hardware components. Forefront Technologies, a document management and imaging solutions provider based in the UAE, reckons that resellers need a special set of skills to play in this area. “Document management is about digitising and indexing documents, and storing these in a central location from which they can be quickly accessed across a network. This consists of five basic elements: scanning, storage, indexing, retrieval and access,” explains Johni R. Jabbor, regional sales manager at Forefront Technologies. ||**||Lack of specific programmes|~|dansmith.gif|~|Dan Smith, product manager distributor operations at Xerox International|~|For such a complex solution, specific channel partner programmes are surprisingly lacking. Partners operating in this specific segment are typically working within generic channel programmes offered by vendors. Xerox operates a tiered ‘Xtra’ partner programme for resellers. “To help our partners achieve the best possible levels of training, Xerox trains sales people to match solutions with problems, and engineers to support those solutions. For customers to understand the value that a solution brings, our resellers must be subject matter experts,” says Smith at Xerox Oki, a relative newcomer to the region, has developed an Oki Academy channel programme to train channel partners on specific product sets. “We want our partners to have structure, so Oki can supply through distributors and also be the first line of support for resellers. The reseller will be trained and will be able to offer service and support staff on the ground,” says John Ross, general manager at Oki Printing Solutions Middle East. ||**||Full market coverage|~|Altaie.gif|~|Audai Altaie, product manager business solution department at Canon Middle East|~|Other vendors such as Epson and Canon operate a closed distribution model, preferring to develop one specific partner in each country they operate in. While this model does create a strong sense of commitment between partner and vendor, both sides need to make sure that they are covering the entire market opportunity that exists. “I actually go and train up the sales teams of the partners we have. This usually produces a better response with more of the reseller team demonstrating an interest in the products,” says Audai Altaie, product manager business solution department at Canon Middle East. High-end scanners are making strong inroads into specific large account sectors in the Middle East. Document management solutions for large enterprises and public sector organisations can create the opportunity to sell hundreds of units as part of just one tender. However, vendors are extremely aggressive in securing these deals, meaning that margin potential is frequently eroded as rivals undercut each other during the tendering process. Scanners and copiers continue to make up an important part of the Middle East IT channel. For vendors and resellers, it is a case of anticipating market trends and balancing their activities accordingly. While the high-end space continues to offer margin potential, low-end scanners and basic MFPs are now very much the domain of volume-oriented distributors and resellers.||**||

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