AIIM - Printers see profits in color copies

Printer manufacturers are expected to pour research and development budgets into improving color printing technology in 2007 as print shops buy digital document handling software to use that color to create more personalized documents.

The changes come as large-volume, black-and-white print shops struggle to find profits in a mature market that is not expected to show growth in printed pages over the coming year, said Charles Pesko, president of InfoTrends Inc., in a speech to attendees at the AIIM/OnDemand trade show in Boston on Tuesday.

Color printing will have a huge impact on the market since standard black and white printed products are dull and commoditized, and show little promise for innovation as printer machine vendors are putting little research and development funding into improving their hardware, he said.

The race by vendors to sell color printers for every corner of the economy will help drive prices down for the new machines, he said. At the AIIM show, vendors launching color printers included Xerox Corp. with new color multifunction DocuColor printer models 242, 252 and 260 and WorkCentre printer models 7328, 7335 and 7345. Likewise, Sharp Document Solutions Co. on Tuesday announced the MX-6201 and MX-7001 models of its color multifunction printers.

But to truly increase profit margins, print shops need to use digital document handling software to create a more automated workflow. "Every time a human touches a job in your shop, you lose profits," Pesko said.

The AIIM/On Demand trade show covers more than physical printing, also showing software products that can track a document's full lifetime, ranging from capture to storage, management, analysis and distribution. That software also performs enterprise content management (ECM) issues like business intelligence, document preservation, compliance with financial and privacy regulations, and meeting legal requirements for sharing information such as e-mail records.

Some shops have already created new niches in the printing industry by combining the technologies of color printing and automated workflow, Pesko said. One example is the "photo memory book," a customized volume created as a single, unique book, printed by companies like ColorCentric Corp. of Rochester, New York. Another approach is guaranteed 24-hour delivery of print jobs ordered over a Web site, performed by Mimeo.com of Memphis and other firms.

The market for such "print on demand" services will grow fast, with the industry growing from US$43 billion in 2006 to $73 billion in 2011, according to an InfoTrends forecast.

Other commercial users have found profit in a new personalized color printing segment called "TransPromo" documents, which are color advertisements printed on monthly utility bills or credit card statements, tailored to fit the interests of individual consumers. Companies have long been stuffing advertising inserts into their billing envelopes, but the new approach would be cheaper and more personalized, he said.

Printers will soon create even more niches as color printing prices fall lower, driven by printer vendors' large research and development investments in color technology, Pesko said. The average price per page of a color print-on-demand job has sunk from $1.05 in 1996 to $0.50 in 2006, and is forecast to reach $0.20 by 2010.

In the longer term, that "color tornado" investment trend could also create a flood of color inkjet printers replacing more expensive laser printers. "To date, we haven't seen a big impact of a color inkjet onslaught, but they could produce color copies at a higher speed and a lower cost than laser xerography," Pesko said.

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Copyright © 2007 IDG Communications, Inc.