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<P>PC Penetration drives Printer market in Bangalore </P>

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DQC Bureau
New Update

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The printer industry is always linked with the PC market. In fact, there is a familiar joke on this that whenever the PC industry sneezes, the printer market in particular and peripherals market in general catches cold.



Bangalore, the Silicon Valley of India, has registered the highest PC penetration of about 14 percent in the country whereas the overall PC penetration in the country was only 9.6 percent. The printer market of Bangalore is estimated to be between 8-10 percent.



The printer market is divided in to three segments -- Dot matrix printers (DMP), Inkjet printers and Laser printers and a handful of players vying for a market share.



Dot matrix printer:



For the last couple of years, there have been talks of the DMP dying a natural death because of the increase in demand for inkjet and laser printers. Not to forget that these two have become extremely affordable to the end-users and also of the high quality print outs.



Though the DMP market has come down considerably, it is still retaining its position for the simple fact being that banks, government bodies and the like insist on duplicate and triplicate copies which proves to be expensive on an ink jet or laser printer.



There are three leading vendors in this category: TVS-Electronics, Wipro and Epson with TVS-Electronics holding about 35 percent in the printer market.



Jairam P Sampath, Channel Marketing Team, TVS-Electronics, South Asia said, "Today MSP 245 is the largest selling DMP. This model represents the ideal choice for the largest segment in terms of Total Cost of Ownership (TCO). Banks use a DMP for passbook printing and DTP applications involve DMP for draft printing and Laser printers for final output. Government agencies use predominantly DMP for lowest TCO and rugged and reliable performance."



He also added, "We offer the best value proposition in all categories represented by us. Our endeavor is to provide the lowest TCO to the customer. Also, from last year the prices of the printers have come down by 10 percent, which has helped the printer industry to grow. More importantly, better features are now available at lower price points. This implies that users now get the best value for money."



For example, DMP prices vary from Rs 6,000 to as much as Rs 32,000. There are some special high-end printers in DMP also which may cost as much as Rs 80,000. Line printers cost more than Rs one lakh. Entry level laser printers costs vary from Rs 20,000 onwards with a mid-range rising from Rs 40,000 onwards. The cost for high-end printers starts from Rs 60,000 onwards.



According to Basil Lean, Director, Ansata Computers Systems, the Small and Medium Enterprise (SME) segment prefer MSP 240 (80 column), MSP 245 (9-Pin character) and MSP 345 (24-Pin character), which is priced at Rs 7,140, Rs 9,180 and Rs 11,225 respectively. These printers are mainly used for accounting and invoice printing. Corporate's prefer heavy duty printers and the most favorable models is HD 755, HD 6045 and HD 5000 which is priced at Rs 16,330, Rs 34,700 and Rs 67,300 respectively. For the banking sector it is HD 5650 which is called the passbook printer and is priced at Rs 67,300. The HD 6045 comes with built-in fonts useful for Bar-coding printing used by the textile industry like Madura Coats.



According to J.S. Ravi, Territory Manager, Karthik Business Machines about 80 percent of the DMPs are used for accounting, preparing balance sheets and for correspondence. Ravi says that, "TVS —Electronics holds about 75-80 percent of the DMP market in the city.



Inkjet Printer



Inkjet printer is the commands the largest share in the printer market and has a market share of 55 percent with DMP and Laser printer holding about 35 percent and 10 percent each. The vendors in this category are HP, Epson, Lexmark, Wipro, Panasonic and Canon. In the numbers game it is HP followed by Epson, Wipro, Lexmark, Canon and Modi Xerox (the last two are recent entrants).



HP’s DeskJet 695 Cci, which was the hot favorite at the entry-level, did well till the end of the first quarter. But today DJ 695 is phased out and now is replaced by DJ 610 C. DJ 610 C is actively purchased in the small office and home office (SOHO) segment and is priced at Rs 6,700.



The other fast selling printer in this category is DJ 710 C priced at Rs 10,500 in the SME segment. At the high-end level it is 895Cxi which is priced at Rs 28,000 used by the corporate.



Epson is focused on the SOHO and SMB with its Stylus range of products. At the entry-level it has Stylus 440 priced at Rs 7,500. For the SMB segment Epson has Stylus 640, 740 and 840 priced at Rs 10,900, Rs 15,600 and Rs 20,800 respectively. And at the corporate level it is 1520 and Photo 1200 priced at Rs 31,900 and Rs 35,000 respectively. Stylus 740 is used by the advertising agency for proofing because it offers quality and speed.



In comparison with HP printers, Epson has better features. For example HP offers 600 Dpi (dots per inch) whereas Epson offers 720 Dpi. Because of the performance and price, Epson’s Stylus 440 is compared with HPs 695Cci.



The Lexmark brand is marketed by TVS-Electronics in India and its CJ 5000 printer is compared with HP’s 695 Cci and Epson’s 440 priced at Rs 7,000. CJ5000 comes with twin head dual cartridges. The other models include LM 7000 that is focused on the higher-end segment and is priced at Rs 18,000 and CJ 3200 priced between Rs 6,000- 7,500.



According to Ravi, the sales for Canon is comparatively less. The model which is doing well BJC 265 SP and 4310 SP which is priced at Rs 4,995 and Rs 6,995 (end user price) respectively.



In a significant move HP and Wipro has jointly launched a new inkjet printer recently in the market -- Apollo P1200 priced at Rs 4,995 (list price). The printer uses the HP technology and is marketed by Wipro Peripherals and sources in the market say that the response has been favorable.



According to N Vinod, Product Manager, Wipro Peripherals Systems, "At the launch of this product in Hyderabad, we booked 2,000 printers at the counter and at least 800-1,000 numbers would have reached the end-user". The printer comes with a one-year replacement warranty and is bundled with an Encyclopedia and 25 hours of Internet free to the end user till July end. "We are expecting to do 30 percent of sales with this product. We have adopted very aggressive sales strategy and with our conversion rate of about 80-90 percent we sure that this product will be a major hit". Apollo P1200 is focused on the SOHO segment.



As in every other product related to the computer industry, margins always say different numbers and it is the same in printers. The margins vary and according to Basel, a distributor gets about 2-3 percent whereas a reseller gets 4-5 percent. Wipro's Vinod says a dealer gets about 2-3 percent whereas a value-added reseller gets 10 percent. But Ravi has something totally different to say. According to him, a reseller gets about 5 percent and a retailer 10 percent, printers sold to the corporate has a good margin of eight percent and to the end user a whopping ten percent.



Laser Printer



In the laser printer category HP holds the major share. Many of the distributors and dealers are of the opinion that HP holds about 95 percent whereas Lexmark holds the rest of the market share. The top-selling printer of HP in this category is LJ6 Gold (entry-level), LJ1100 and LJ1100A (upgradable with copiers and scanners) and is priced at Rs 23,000, Rs 24000 and Rs 32,000 respectively. LJ2100M (high-end) is priced at Rs 46,000 and is mainly sold to institutions and advertising agencies for DTP work.



A recent trend is the PC vendors bundling printers with the PC to attract the buyers. This way the buyer gets a PC and printer at very economical price. Overall, this year was good for all the vendors specially HP and Epson. The printer market will go up this year as the awareness of the PC in the market especially in the SOHO market is fast developing and these segments are the largest buyers of printers.





Driver of the Printer Market:





  • Highest PC penetration in the city


  • Emergence of the SOHO segment by 60 percent.


  • Color usage.


  • Internet awareness and usage.


  • Education and office purpose.


  • Reasonable price range starting from Rs 5,000.


  • Reduction in the prices of the printers by 10-15 percent.

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Best selling models of top brands through the distributors and dealers:



  1. HP DeskJet 610Cci, DJ710, LJ 6L Gold


  2. Epson Stylus 440, 640, 740


  3. TVSE MSP 245/245 Plus


  4. Canon 255 SP, 4310 SP


  5. HP LaserJet LJ6 Gold, LJ 1100(Laser Printer)
  6. The market share by Technology 





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    1. Inkjet: 55%


    2. Dot matrix: 35 %


    3. Laser:10%


    4. Market Share by units





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      1. HP: 55%


      2. Epson: 18-20%


      3. TVSE:15-18%


      4. Wipro: 8%


      5. Lexmark: 2-4%


      6. Canon and others..2%
      7. Channel Sales-Share by Buyer segments





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        1. Small and medium Business (SMB) = 45-50%


        2. Small office and home office (SOHO) = 30-35%


        3. Large business = 12-15%


        4. Government and educational institute = 10-13%


        5. Ansata Computer Systems Pvt Ltd



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          Brands Dot

          Matrix Printer
          Inkjet

          Printer
          Laser

          Printers
            Units Value(Lakh) Units Value(Lakh) Units Value(Lakh)
          TVSE 450-500 39        
          HP     200 13 45 16
          Epson     30 1.95    
          Lexmark     170 8.5 10 4





          Karthik Business Machines Pvt Ltd

          Brands Dot

          Matrix Printer
          Inkjet

          Printer
          Laser

          Printers
            Units Value(Lakh) Units Value(Lakh) Units Value(Lakh)
          TVSE 200 24        
          HP     120 10 33 8
          Epson     120 10    
          Lexmark     40 3    

          - A CI Report

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