Peripherals: Scanners Low Scan Rate

Last year we talked about the declining charm of the scanner market. During

FY 2005-06, the cannibalization effect started in full swing and had a strong

impact on the shipments of scanners. This is just not an India trend. Globally,

scanners are losing their sheen. Driving this change without doubt is the

multifunction device (MFDs) and their all in one capability in wooing the buyers

to opt for MFDs instead of scanners. The impact was felt to the maximum extent

on entry-level scanners, which once was a thriving market when printers used to

be predominantly single function. But since 2003, MFDs slowly started making

their presence felt and provided ample pointers of an impending impact on

standalone input devices.

According to vendors like HP, slowdown is an inevitable reality in the

scanner market. While it's reasonable to expect that scanner sales will

plateau, scanning itself will become all pervasive, going from conventional

image scanning to hard copying, faxing, and document management applications.

A look at the shipments over the year indicates volumes heading south. For

instance, during FY 2005-06, according to IDC India, scanner market shipments

stood at 157,873 units valued at Rs 105 crore. This represents a decline of 9%

in unit terms.

While the mainstream scanner market faces touch times ahead, the high-end

production scanners have entered a separate market segment.

MFDs vs Scanners: Value Proposition



When analysts talked about the impending cannibalization effect MFDs will

have on single-function output devices, the assertion was brushed aside as too

forward looking. But a look at the scanner market clearly proves that MFD

cannibalizing other output devices have started happening. In the printer space,

Inkjets have started facing the onslaught of MFDs. Inkjets, for instance, that

have been posting flat values over the last two years, showed marginal decline

in volumes for the first time. Clearly, the current market dynamics foretell the

trends ahead.

For one, vendors will find the going tough in projecting the USP of

single-function devices because with a marginal additional cost, a consumer

would prefer a MFD that can print, scan, and copy. With Inkjet MFDs becoming

highly affordable over the year with prices breaching the Rs 5K mark, a consumer

intending to buy a scanner at Rs 3K might opt for a MFD. Still, vendors are

hopeful that exclusive consumer needs-including quality output and special

tools to enhance the image-will drive the demand for standalone devices like

scanners.

Shrikanth G



shrikanthg@cybermedia.co.in