by Lou Slawetsky
 

It seems like just yesterday (when you get to be my age, everything seems like it was just yesterday) that a new class of color imaging system burst into the market.  Those were the days, a scant 8 – 10 years ago, when full color imaging systems were devoted to graphics applications.  They offered super high quality (for that time), color matching and a full array of color adjustment tools.  Their features made them ideally suited for the graphics and low-end production markets.  Their idiosyncrasies limited their use in the general office market. For example:

·         The systems were expensive, generally carrying a price tag of more than $50,000.

·         Per page cost for color output was high – exceeding $.25.  Of course, even at that level, these systems could be cheaper than producing short run work on an offset press, or using film for color separations.

·         Per page cost for monochrome (black) output was as high as full color cost, since these earlier systems produced “process black,” combining all primary colors to produce black images.

·         Color files were so large and complex that standard controllers integrated into the systems could not handle them, given birth to the need for outside providers such as EFI.
 

            The playing field of vendors offering these systems was relatively narrow, and featured players that included Canon, Ricoh and Xerox.  The high cost of product development kept most others out.  Then, came the business color systems.  The first of these systems used the phrase, “business color” as a euphemism for, “we can’t get the quality up to the level of the other units, so we’ll try to sell it to the general office.”

            This strategy created two distinct markets – office use, where color was anything that was not black and white, and graphics, where color matching, continuous tone capability and high resolution were all “table stakes” required to get you into the game.  Ironically, it’s the office market, the one that began with image quality problems, that is now accounting for virtually all of the explosive growth in color revenue.  Why?

·         Image quality has improved dramatically.  In some cases, office color systems are being sold as replacements for first and second generation graphics systems.

·         Hardware prices have dropped to the point where there’s not much more than a 15% - 20% difference in the cost of hardware when comparing a full color system with the monochrome MFP it is intended to replace.

·         Full color page cost has dropped to below $.08 for virtually all systems.  We would look for especially aggressive pricing for the soon to be shipped Kyocera KM-C2520/3225/ 3232 announced at their recent dealer meeting, thanks to the use of their ECOSYS^® imaging system.

·         Service costs are declining.  For example, the aforementioned Kyocera systems offer a PM interval of 300,000 pages – more than most departmental monochrome systems.

·         Third party providers help limit color imaging cost by assigning user rights or budgeting the number of color pages each user can produce in a given month.  Equitrac is one of the leaders in this important field.

            Still, there are cautions.  Before committing to the systems that will help you take advantage of the growth offered by the color market, you’ll want to know:

·         How does the system calibrate?  What’s the impact on overall productivity?

·         How consistent is the color from the beginning to the end of a job, from job to job, and from unit to unit.  Color output might not have to match a chart in this market, but it must be consistent.  That is, the colors must be the same all the time.

·         What’s the impact on per page toner consumption when page coverage exceeds the manufacturer estimate of 5% per color?

·         Will you be able to partner with a provider such as Equitrac to help your customers control their costs, or to assist in charging back images to specific departments or clients?
 

            Color is fast becoming ubiquitous in the office.  It’s everywhere.  Some analysts offer opinions that, within five years, all MFPs will be “color capable,” offering color as, at least, an option.  Xerox Corporation estimates that each color page results in five times the revenue as a corresponding black and white “click”.  We think that’s too conservative and estimate a revenue ratio of at least 6 to 1 – and, for the present, at higher margins.
 

            In the not so distant future, color will no longer be an option for the systems you’re selling.  For now, color is no longer an option if your business plan is to succeed.

 Scott Cullen has been writing about the office equipment industry since 1986. He can be reached at culcom@voicenet.com.