Copier Industry Update February 4th, 2019 (with comments from Art)


Xerox reports decline is sales again

- announced results for its fourth-quarter and for its full-year 2018
- Net income for the fourth quarter was $137 million
o Total revenue for quarter was down 7.8% to $2.53 billion
 Total equipment revenue down 9.5% to $629 million
• A4 device revenue down 2.9% to $66 million
o A4 color device installs up 11%
o A4 b/w device installs up 9%
• A3 device revenue down 2.3% to $418 million
o A3 color device installs up 3%
o A3 b/w device installs up 1%
• Production print device revenue down 16.9% to $138 million
o B/W production print installs down 34%
o Color production print installs down 12%
o Managed Document Services contracts down 1.7% and now make up 35% of total revenue
o Service/supply revenue down 7.2%
o Total revenue in the U.S. down 5.2%
o Only 3.7% of revenue spent on research & development (R&D)
- For the full 2018 year, posted total revenue down 4.2% to $9.83 billion
- approved $1.0 billion in share repurchases to boost stock value
- $1.2 billion in unfunded pension liabilities
- $5.2 billion in debt
- Announced it is moving 28,000 accounts from its factory direct branches to Global Imaging locations (now known as Xerox Business Solutions division)
o Accounts moving include:
 small- and mid-size government
 healthcare
 education
 graphic-communications

Note from Art: Oh my! $5.2 billion in debt! I listened in on their annual kick off report and Xerox still has a sizable amount of cash on hand. I believe it was over $1 Billion.  We'll have to wait and see how the move of the 28K in accounts go for them. I've already heard from other sales peeps that many accounts were not happy with the transfer.

Xerox wins production print contract

- Award from Office Depot/OfficeMax to renew contract
- includes 8,000 devices across retail stores and regional offsite production facilities
- approximately 1,400 locations
February 3rd, 2019

Xerox shareholders report sales of stock

- Morgan Stanley announced it has lowered its stake in shares of Xerox by 27.5%
o sold 481,709 shares during the quarter
- insider Michael David Feldman sold 3,729 shares
- Xerox has a market capitalization of $5.85 billion
- Zacks Investment Research issued a rating of “hold” for Xerox shares
o ValuEngine rated shares at “sell”
- Citigroup lowered their price target on shares of Xerox from $37.00 to $34.00

Note from Art: It's never a good thing when shareholders start selling their stock and visa versa it's good when they purchase more shares

Xerox warns of scanning issue

- issued notice regarding users encountering document scanning problems when using SMB (server message block) network file sharing protocol to scan documents to PCs running Microsoft Windows 7 or Windows 2008 R2.
- Confirmed that Microsoft Windows update KM4480970 caused the issues, but that update KB4487345 resolves the problem

Fujifilm launches new production color laser

- the new DocuColor 7171P was launched in Japan
- (may be relabeled by Xerox and launched in the U.S. later this year)
- 4 tandem OPC drum design
- Small footprint for light production use
- In addition to CMYK, also offers optional gold, silver and white toners
- 110 volt power supply
- 70ppm top speed
- Pricing not announced

Fujifilm launches new production inkjet

- The “11000” model is advertised as offering customers the ability to print on standard offset papers to offset quality
- (unknown if Xerox will relabel and market in the U.S.)
- continuous feed color inkjet press using rolls of paper
- uses same Samba printheads
- Uses water-based ink with the polymerization compounds included
o Includes fixing agent which manages the wetting properties and minimizing stretch caused by water penetration into the fibers of the paper.
- 4 ink droplet sizes
- 1200x1200dpi
- Top print speed of 80 meters per minute
- ink is continuously circulated to reduce nozzle blockage
- screening algorithm reduces graininess and streaking
- inline inspection systems
- twin drying system
- web passes to a large circumference heated drum followed by an optional infrared section
o to reduce any tendency towards ****ling of the paper
- will start shipping in Japan in July, 2019
- pricing not announced

IDC publishes vendor marketshare

- report entitled “Worldwide Hardcopy Peripherals Market, Unit Shipments, Company Share and Year over Year growth, Q3 2018”
- report based on numbers reported by the manufacturers
- (some of the manufacturers do not certify the numbers they report)
- Includes all printers and MFPs, both consumer and business use, inkjet and laser
- HP Inc. had 40.8% marketshare with 10,180,524 units shipped, down 2.9%
o Canon = 21.3% = 5,391,363 units, up 7.7%
o Epson = 17.8% = 4,441,577 units, down 1.8%
o Brother = 7.2% = 1,802,325 units, down 2.1%

Ninestar of China launches new Lexmarks

- Lexmark (a division of Ninestar of China) now offering the B22336dw printer and MB2236adw MFP
- B22366dw measures just 8.5″ high x 14.0″ wide x 13.1″ deep, while the MFP version measures 13.9″ high x 16.4″ wide x 14.2″ deep.
- will be sold through the Lexmark dealers and can be ordered directly from global distributors such as CDW, Staples, Fry’s, Printerland, and more
- Base MSRP of B2236dw is $159.99
o Top speed of 26ppm
o Max paper capacity of 251 pages
o 2 line LCD display
o 256MB RAM
o Max duty cycle of 30K/mo
o Recommended volume of 250-2.5K/month
- Base MSRP of B2236adw A4 b/w MFP is $229.99
o ADF can scan in color
o 512MB RAM
- both have b/w laser engines
- top speed of 36ppm
- auto duplex standard
- Black toner cartridge yield of 3000 pages for $79.99
- Drum unit = $81.99
- built-in print controller
o standard Wi-Fi connectivity
o data security including audit logs
o 1GHz processor
o 256MB RAM
o 10/100/1000BaseT & USB ports

Note from Art:  Ninestar China, kinda scares me, makes me wonder what type of technology they are putting in these MFP's.

Canon to refresh 19 MFP models

- The existing imageRUNNER ADVANCE C3520 III, C3530, C5535, C5540, C5550, C5560, C7565, C7570 and C7580 color A3 MFPs will be replaced by new models with same model numbers, except end with Roman numeral “III” instead of “II”
- The existing imageRUNNER ADVANCE 4525, 4535, 4545, 6560, 6565, 6575, 8585, 8595, 8505 b/w A3 MFPs will be replaced by new models with same model numbers, except end with Roman numeral “III” instead of “II”
- This is because they all use same print engine from previous models
- New features include a larger 10.1’ color LCD control panel, as well as;
o New shortcut icons
o Consumables dashboard
o Security detection on startup
o Audit logs
o Standard support for cloud-based solutions

Canon reports last quarter earnings

- Operating profit up 30% to 99.58 billion yen ($909 million)
- Net sales down 5.5% to 1.06 trillion yen ($9.7 billion)
o Office division (MFPs) net sales up 0.1% to 1,807.3 billion yen
- Projects a 2019 sales decline of 1.3%, and operating profit decline of 5.2%
- Has $4.72 billion in cash

Note from Art: Wow $4.72 billion in cash! MFP sales were up a paltry .01%, but that's a heck of a lot better than some other MFP manufacturers are reporting.  Kudos to Canon!

DocuWare solution in cloud growth

- At the start of 2019, more than 2,000 customers from a wide variety of industries had opted for the company's Software as a Service (SaaS) cloud model for its document management and ECM solutions
- number of companies that chose DocuWare Cloud grew by 53% in 2018
- now licensed by more than 100,000 users, up 100% from 2017
- Stored documents were up 257% in 2017 and 124% to 112 million last year
- Users per customer and archived documents per customer increased by 37% and 126%S respectively between 2016 and 2018.

Note from Art: Some incredible numbers here. DocuWare Kinetic HR & AP cloud solutions must be booming!

EFI wins Web-to-print solution contract

- award from Vanderbilt University of Nashville, TN
- installed EFI Digital StoreFront in its Printing Services (CRD)
- online portal through which users can print custom stationary, graphics or banners
- “The purpose [of DSF] is to help streamline and simplify faculty, staff and students’ experiences with printing services,” said Sean Carroll, Director of Business Services Operations. “Historically, students would either walk up to the [Campus Copy] counter or email one of our project coordinators whenever they had a print request. What Digital StoreFront does is bring our software into the 21st century.”
- Integrated with Vanderbilt single sign-on, users can pay for their jobs with Commodore Cash online and then pick them up at Campus Copy in Rand Dining Center.

Dropbox makes acquisition

- announced it has acquired HelloSign for $230 million
- HelloSign is vendor for electronic signature solutions
o Claims to have 80,000 customers, including InstaCart and Lyft

Amazon to offer OCR solution?

- Announced it will launch Amazon Textract, a cloud-based online solution to “extract text and data from virtually any document”
- Includes accepting tables and forms
- Service starts at $0.00015 per page or $1.50 for 1000 pages
o Table mode is $15.00 for 1000 pages
o Forms mode is $65 per 1000 pages

Note from Art:  Seems interesting maybe it's time to check this out

Epson reports last quarter earnings

- Total revenue down 0.5% to 829 billion yen
- Business profit flat at 58 billion yen
- “Printing Solutions” division revenue down 9.8 billion yen to 201.7 billion yen
o Printer/MFP sales down 11.8 billion yen to 143.8 billion yen
o Inkjet was 85% of device sales

Ricoh launches new solution for legal vert

- Now offering Ricoh Acumen, a tool designed to help Relativity review solution users increase efficiency in law firms
- Provides advanced business analytics and reporting features
- Workspace metrics and statistics
- Real time review performance tracking
- Pricing not announced

Ricoh wins MPS contract

- Award from Western Carolina University
- Includes printers and MFPs, total of 231 devices
- Solutions include:
o scan to OneDrive
o card readers for authentication
o “print from anywhere” (follow you printing)

Ricoh wins PPS contract

- Award from Schiele Group, a commercial printer in Elk Grove Village, IL
- Installed two Pro C9210 production color laser systems and two Pro 8220 production b/w system

Kodak Alaris partners with Nexgen Software

- Newgen markets claims processing software for the financial services and insurance vertical markets
- Kodak Alaris scanners now listed on their “certified document scanner” list for document capture

Kodak has another reorg

- “Consumer and Film” division is now “Brand, Film & Imaging”, led by Eric Mahe
- “Unified Workflow Solutions’ is now “Software’ division, and Todd Bigger is new president
- Roger Byrd is new general counsel, secretary and SVP
- Uwe Boerke is new Chief Human Resources Officer and SVP

Xeikon launches new color PPS

- Xeikon, headquartered in The Netherlands, launched the new Xeikon CX500 production color system
- Uses dry toner, CMYK plus 5th color
- Roll to roll system designed for book cover and dust jacket production
- Web width of 520mm
- Top speed of 30 meters per minute
- 1200x1200dpi (4 bits per pixel)

Hon Hai reports its Sharp division earnings

- Reported earnings for last quarter from Sharp, which is owned by Hon Hai Precision of Taiwan (aka Foxconn)
- Net sales down 3.2%
- Operating profit down 3%
- Net profit up 13.9%
- For last 9 months, its “Smart Business Solutions” division had total revenue grow by 2.6%
- Lowered its net sales forecast down 7.1%, and operating profit outlook by 4.5%

Note from Art:  Sooner or later Terry Gou is going to pull the plug on this operation

Toshiba to launch new color A3 MFPs

- New models are the eSTUDIO 5516AC, 5516ACT, 6516AC, 6516ACT, 7516AC and 7516ACT
- Charcoal black plastic exterior
- All offer 4 tandem OPC drums
- 20 second warmup time
- Speeds range from 55ppm to 75ppm color and 65ppm to 85ppm b/w
- Base MSRPs range from $31,362 to $42,056
- Use same print engines from previous models
- Max duty cycles range from 480K/mo to 600K/mo
- Optional fax board
o Fax preview on LCD panel
- 1200x1200dpi (advertised as offering 3600dpi through interpolation)
o 2 bits per pixel color imaging
o Improved thin line processing for rendering of small fonts
- 10/1” color touchscreen LCD control panel
- Document feeder holds up to 300 originals
o Scans both sides of original
o Skew correction
o Scan preview on LCD to rotate and change order of pages
o Top scan speeds of 120opm or 240ipm
- Paper supply holds up to 12” x 18” sheet size
o Paper supply maximum ranges from 4,780 to 6020 sheets
o “AC” models have 4 paper drawers, while the “ACT” models have tandem paper drawer configuration
o 47” banner sheet support in bypass
o Auto duplex up to 140lb. index
- Needs 16amp circuit
- Finishing options including stapling, bookletmaking, hole punch
- Built-in print controller
o Actual maker unknown
o USB and 10/100/1000BaseT ports standard
o PCL, PS and XPS print drivers standard
o 1.75GHz processor
o 320GB hard drive (self-encrypting as default is spool to HDD)
 HCD-PP security certification
 Optional data security kit required for FIPS certification and IPsec

Court rules on copier lease

- The Arkansas Court of Appeals affirmed a Mississippi County Circuit Court ruling that former City of Blytheville Waterworks GM, Gary Phillips, is personally responsible for $100,000 copier debt to DLL Leasing, and not the City
- Apparently in court, Phillips failed to respond to complaint, so Judge Richard Lusby ruled that this means his signature was on the lease and he did not have authority to sign.

Note from Art: WTF happened here? General Manager signs a lease, the lease gets processed by DLL. DLL then pays the vendor because the lease had a signature. Some reason the deals goes south and the GM is foot with a personal guarantee!  Something is rotten in Demark.

OpenText buys solution firm

- OpenText of Ontario, Canada announced it has acquired Catalyst Repository Systems Inc. (CRS) of Denver, CO.
- CRS is a vendor for eDiscovery solutions for legal vertical
- Purchase price of $75 million

Kyocera reports its last quarter earnings

- Includes all divisions of the company, aka Kyoto Ceramic Company of Japan
- Total sales revenue up 1.7% to 413,779 billion yen ($3.728 billion)
- Reported pretax loss of 1.5 billion yen
- profit attributable to owners of parent company down 96.5% to loss of 28,622 billion yen
- “Document Solutions” division (MFPs, printers) sales rose 2.6% during past 9 months

Note from Art: Excellent news that MFP's and printer rose that 2.6%.  Kyocera continues to divest with purchasing non-print companies

Large dealer makes another acquisition

- RJ Young, headquartered in Nashville, TN, announced it has acquired Digitec, headquartered in Jackson, Mississippi
- Will have combined over 28 locations and over 600 employees in the southern U.S., marketing Canon & Ricoh

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