Say Cheese…

Amulti-functional device (MFD) is the in-thing in the Indian IT peripherals
space today. It has been one of the few products that has lit up the otherwise
lackluster IT hardware market in 2002. The reasons are simple–the product
appeals on the most important deciding factor in any corporate purchase decision–PRICE!
All corporations big or small need fax machines, scanners, copiers and printers
in varying degrees. MFDs offer all these utilities in just a single device and
at a fraction of the combined price of these individual products. This offers a
good proposition in the market when everyone is trying to cut costs in order to
stay competitive in a sluggish market. Another thing where MFD scores is with
regards to space, which is available at a premium in a large number of offices
and not to forget the utility the device offers in terms of convenience of
getting four different jobs that can be done with the same device.

Sindhwani: Senior analyst at IDC India

As per IDC (India) estimates, 43,185 units of multi function devices worth Rs
246.46 crore were sold in the Indian market during 2002. This represents a
growth of more than 115% in unit terms and more than 60% in value terms over
last year.

These devices make the process of document management, in paper and digital
formats a lot easier due to convergence in printing technologies. The concept of
convergence in Document Management has its precinct in creating, managing and
disseminating business information available in myriad formats.

The overall Multi Function devices market is divided into two main
categories, Inkjet and Laser. Inkjet MFDs are typically used for small workgroup
purposes that don’t need heavy duty jobs but require all or most of the
functions possible with an MFD like printing, copying, faxing and scanning. For
heavy duty printing and copying jobs the laser MFDs are an ideal choice.
Interestingly though the laser MFDs are also capable of scanning and faxing
applications they are sold mostly with printing and copying modules. Since these
devices are meant for a larger workgroup and for heavy-duty jobs, printing and
copying take precedence over the other applications. There are different
segments at which various Laser MFDs are targeted and the segments depend on the
printing and copying speeds.

Vendor review

HP is the leading brand in the inkjet MFDs market followed by Canon and
Samsung. The laser-based MFD market saw Xerox, Sharp and Toshiba accounting for
more than half the market. Canon’s performance in the laser MFD market has
been the best when compared with the vendor’s performance last year. It is one
of the few vendors along with Xerox that has been consistently selling higher
end digital multi-function products.

Outlook

The prospect for MFDs looks bright for the next three years. Market is
expected to record a compounded annual growth rate of 98.6% from 2003 to 2005.
Inkjet MFDs are being used for more and more applications thereby increasing the
overall imaging market. In the coming years, Inkjet MFDs are expected to be used
for more and more applications that would expand the overall digital imaging
pie. In addition to that, there is expected to be a significant shift from the
Inkjet printers and fax markets in favor of inkjet MFDs. The home segment is
expected to provide the biggest growth opportunity during the next three years
as the consumers become aware of the possible uses and applications possible
with the Inkjet MFDs. Laser MFDs are also expected to record significant growth
rates as the market shifts from analog copiers to the digital multifunction
copiers. The immediate thrust is expected to come from the government that will
shift its copier buying from analogs to the digital multi functions. The
government, being the single most important segment in the copier market, will
provide plenty of opportunities in this space.

As the concept of total document management gains prominence among the
corporate consumers, the market for flatbed laser multi functions will bgrow
exponentially, more so in the top end of the market.

AJAY SINDHWANI