respectively. Ricoh offered two analog electrostatic color copiers for $13,495 and $14,724, and one digital model for $51,995. Toshiba offered a digital thermal transfer copier for $10,599. Sharp introduced color copiers using thermal transfer. While the demand for color grew with the introduction of color computer monitors, the market growth for color copiers was co-opted by the introduction of affordable computer peripherals that generated color originals with dot matrix and other non-impact printers. Prospective users with limited budgets could not justify top quality color copiers and settled for lower quality color printers. Color copiers reached sales of about $2 billion by 1990, compared to total U.S. copier sales of $14 billion. With the arrival of precise color copiers, currency counterfeiting recently has become a problem in Japan and abroad. In September of 1992, a group of Japanese governors and ministers issued a request that manufacturers of color copiers voluntarily develop and adopt technologies to foil those who forge currency. In response, the Japan Business Machine Makers Association announced that its members should apply existing forgery-prevention techniques in cooperation with law enforcement and treasury authorities. By 1993, the copier manufacturers were announcing numerous proprietary techniques for foiling counterfeiters. However, manufacturers, law enforcement agencies and treasury officials agree that they must cooperate closely to refine solutions. Meanwhile, copier manufacturers continued developing advanced technologies to offer the functions that users request and to upgrade the performance of their products. Multifunction peripherals that do fax, copy, scan and print were seen as an untapped $1.5 billion market for the 1990s. Industry Structure Japanese manufacturers commanded the largest share of the worlds copier market. Starting in 1975, copier production and exports had grown rapidly. With growing trade friction between Japan and its export markets in the 1980s, Japanese manufacturers were shifting to overseas production. As shown in Tables 1 and 2, Japanese production dropped 14.4% to a low of 2.21 million units or 458 billion yen in 1987. After a period of recovery, copier production in volume for 1992 totaled 2.38 million units (a 10.5% increase over 1991), while sales stayed flat at 550.7 billion yen. Exports fell in 1992 to 1.7 million units and 346.7 billion yen. While dropping 7.8% in units and 7.2% in value, exports still accounted for 71.6% of volume, and 62.9% of Japans production value. In 1993, copier production fell 7.8% with 2.21 million units. The value reached 524.1 billion, down 4.8% from 1992. In 1993, Japans copier exports continued to fall, reaching 1.52 million units (down 10.7%) and 316.2 billion yen (down 8.8%). Exports accounted for 68.8% of the copier production quantity and 60.3% of production value in 1993. As yen values increased export prices in the 1990s, Japanese manufacturers were pressured to reduce costs.

which the machines may have a monthly copy volume of only 1,000 copies, a photoreceptor that will last for 50,000 to 100,000 copies will be the only photoreceptor needed during a copiers useful life. Without the need to change the photoreceptor, maintenance contracts are not needed. This removed any incentive for dealers to sell low-end plain paper copiers. Improved data communications allowed vendors to offer remote diagnostic systems for top end models.
Table 5: Dataquest Copier Product Segment Definition
Dataquest Segment PC Multicopy Speed (ppm) Up to 12 Machine Form/ Platen Tabletop/ moving or stationary platen Tabletop/ moving or stationary platen Tabletop/ stationary platen Tabletop or console/ stationary platen Console or tabletop/ stationary platen Console/ stationary platen Console/ stationary platen Paper Feed Single cassette Average Monthly Copy volume 400 Average Retail Price ($) 1,103 Machine Description Minimally featured; easy to install; superior reliability; compact; light-weight; user serviceable Possible features; reduction, enlargement, zoom, sheet bypass, optional input/output devices Possible features; reduction, enlargement, zoom, optional input/ output devices, LCC Systems with standard features of reduction/enlargement, zoom, feeder, sorter, and LCC Highly featured Highly featured with finishing, input/output devices, magnification Large units with numerous peripherals and special features

Up to 20

Single or dual cassette Dual or triple cassettes or trays Dual or triple cassettes or trays Dual or triple cassettes or trays Dual or triple cassettes or trays Dual or triple trays

11,600

45-69 70-& above

18,500 55,000 158,000

16,113 18,00080000 78,000235,000
Source: Dataquest (April 1994)
Competitors were trying to strengthen their position in the market by increasing speed, lowering prices, and adding technology. The primary industry competitors were Canon, Kodak, Konica, Minolta, Panasonic, Ricoh, Selex, Sharp, Toshiba, and Xerox. As shown in Tables 6 and 7, the Canon, Xerox and Sharp were the overall industry leaders with 25.7%, 18%, and 14.3%, respectively, of the U.S. installed copier market by 1993. The leading competitors by segment include:
1. In the personal copier segment, Canon with 56.2%, Xerox with 24.4%, and Sharp with 17.5% accounted for 98.1%. Xerox had increased market share by 6.4% with equal loss to Canon and Sharp. 2. Competition in segment 1 was much more fierce with more equally matched firms. In 1993, Sharp, Xerox and Canon had similar shares with 17.2%, 15.6%, and 15.5% market shares. Mita held a 10.7% share, followed by Konica with 7.4%, Minolta with 6.9%, Lanier with 6.3% and Ricoh with 4.9%. Canon lost three percent share in 1993 to these other competitors.

3. In segment 2 markets, Canon and Xerox lead with 23.2% and 21.6% shares. Sharp and Minolta followed with 9.8% and 8.6% shares. Mita, Lanier, Ricoh, Toshiba and Konica had similar shares at 6.3%, 6.0%, 5.5%, 4.5%, and 4.2% respectively. Pitney Bowes held 3.1%. Mita lost 3.9% share in 1993, and Xerox lost 1.1% share to the other competitors. Segment 3 was nearly equally distributed between Minolta, Mita, Canon, and Sharp with 11.2%, 11.1%, 11.0%, and 10.7% market shares. Both Minolta and Mita had gained share in 1993 at the expense of Canon and Sharp. The next group of competitors also had
similar shares. Xerox held 8.8% share, Ricoh 7.9%, Lanier 7.6%, and Konica 7.3%. Toshiba and Pitney Bowes followed with 5.6% and 5.4% shares.
Table 6: U.S. Plain Paper Copier Sales Estimates for 1993 (000 units) PC Canon Kodak Konica Minolta Mita Oce Panasonic Ricoh Sanyo Sharp Toshiba Xerox Total Percent 230.0 76.8 39.3 37.0 63.8 19.1 33.8 0.4 97.3 39.9 75.0 482.4 33.8% 51.9 10.1 19.2 19.2 3.2 21.1 0.2 21.0 22.6 46.5 215.0 15.1% 15.5 10.1 14.9 19.6 6.7 16.9 13.3 16.3 11.0 124.3 8.7% 37.2 10.5 4.8 23.4 3.9 0.3 12.3 9.9 10.1 34.5 146.9 10.3%
5 8.8 6.4 1.0 1.8 5.2 0.6 5.3 2.1 2.0 33.2 2.3%
Total 420.2 8.7 71.0 77.7 135.0 5.0 33.1 89.4 0.7 315.1 88.9 183.0 1,427.8 100.0%

3.8 3.8 0.1 171.5

409.2 28.7%

14.0 16.8 1.2%

1993 Market Share (%) 29.4 0.6 5.0 5.4 9.5 0.4 2.3 6.3 0.0 22.1 6.2 12.8 100.0
1992 Market Share (%) 29.1 0.6 5.3 5.5 10.3 0.3 2.6 5.8 0.2 20.6 6.4 13.4 100.0
Source: Dataquest (April 1994) Table 7: U.S. Plain Paper Copier Installed-base Estimates for 1993 (000 units) PC 5 Canon 889.0 343.7 201.7 86.2 106.0 33.2 A.B.Dick 12.6 16.0 8.5 7.7 1.2 Eastman Kodak 48.4 73.6 Gestetner 25.2 10.1 6.7 5.3 0.8 Konica 156.3 62.9 55.4 38.8 8.3 Lanier 164.2 66.6 47.4 18.4 9.4 Minolta 135.8 119.0 37.6 22.6 2.1 Mita 25.3 205.8 70.4 59.8 75.6 9.7 Monroe 19.5 3.3 12.2 8.9 1.6 Oce 23.5 0.6 Olympia 20.2 2.1 2.0 0.7 Panasonic 21.8 44.6 20.5 7.6 12.8 0.2 Pitney Bowes 42.1 29.5 22.7 27.7 1.8 Ricoh 24.1 98.3 40.0 39.3 61.9 11.5 Royal 15.0 3.2 2.7 1.3 0.1 Sanyo 8.0 6.4 2.5 0.1 Savin 53.3 64.9 40.5 40.6 3.1 Selex 11.9 9.6 7.3 4.9 2.1 Sharp 341.9 363.5 101.0 46.9 65.3 5.9 Silver Reed 2.2 Swintec 6.2 Toshiba 114.8 35.7 27.6 22.6 0.4 Xerox 253.3 371.1 231.9 104.0 130.1 3.0 Total 1,571.8 2,204.3 1,090.8 614.6 723.1 168.6 Source: Dataquest (April 1994)

68.7 82.1

Total 1,659.7 46.0 133.8 48.2 321.7 306.1 317.1 446.6 45.5 25.6 25.0 107.5 123.7 275.1 22.3 17.0 202.4 35.7 924.5 2.2 6.2 210.1 1,162.1 6,455.2
Market Share (%) 25.7 0.7 2.1 0.7 5.0 4.7 4.9 6.9 0.7 0.4 0.4 1.7 1.9 4.3 0.3 0.3 3.1 0.6 14.3 0.0 0.1 3.1 18.0 100.0

5. In segment 4, Xerox held 23.5% share, followed by Canon with 18.4% and Mita with 12.1% shares. Shares were relatively stable with other players having smaller shares. Sharp had a 6.7% share, Konica 6.1%, Kodak 5.9%, Ricoh 5.5%, Lanier 3.7%, and Toshiba 3.1%. 6. In segment 5, Kodak lead with 18.7%, followed by Canon with 18.4%. Ricoh and Mita held 11.5% and 10.2% shares, followed by Sharp with 6.3%, Lanier with 6.3%, Xerox with 6.0%, and Minolta with 5.1%. Savin and Pitney Bowes lagged with 3.3% and 2.7% shares. 7. In segment 6, Xerox dominated with 83.3% share. Kodak followed with 13.1%. Oce and Lanier held only 3.0% and 0.6% respectively. As shown in Table 8, markets were divided by copier needs into low volume personal use markets (with 27% of the market), moderate volume convenience markets(with 61% of the market), high volume copy center markets, and super fast central printing markets. Personal copier markets typically purchased copiers with speeds up to 10 copies per minute (cpm). Convenience markets purchase copiers with speeds ranging from 10 to 45 cpm. Most larger customers were replacing existing models with higher speed machines. As a result, competitors were increasing the capabilities of their models. Panasonic had introduced low-end models with speeds of 12 cpm. Such strategies of up-rating machines within each market without increasing prices were becoming common and was affecting definitions of market segments. Convenience and personal copier users are looking for low price, compactness, and ease of use. Copy centers used machines with speeds between 46 and 90 cpm. Copy centers and central sites accounted for 13.8 percent of the PPC units sold. Central duplicating centers used the highest speed copiers with over 91 cpm. Central sites want the high tech, top of the line copiers with color capabilities, high speed, and interaction with computers.
Table 8: U.S. Copier Market Usage Projections Category Speed (ppm) Personal Copying Convenience Copying 10 or fewer 10 to to to to to to or more
Copy-center Copying or Duplicating Center-site Xerographic Duplicating Source: BIS Strategic Decisions
Average Monthly Volume 1,300 1,240 1,850 1,750 4,100 3,850 7,750 7,000 17,600 14,350 49,500 46,000 178,000 162,000
The personal copier market now included copiers with copy speeds as high as 10 to 12 pages per minute. Personal copiers had an average retail price in 1993 of $1103. Dataquest (April 1994) projected a decline in segment 1 copier placements from 480,000 units in 1993 to 380,000 units in 1998, declining an average of -4.66% annually. Competitors targeted the growth in home offices to sustain future growth. However, copiers faced growing pressure from less expensive printers that can create multiple original copiers. The rapid decline in laser printer prices was making personal copiers less attractive. Panasonic was selling its laser quality post script LED

U.S. Copier Market Faces Threat From Color Printing Systems. Office Equipment & Products. October 1994, p. 32.
position in the lucrative, very high volume central reproduction department market. Kodaks LionHeart publishing system was the only close competitor and had limited success in this market. Copiers operating in central copying departments must sustain large--volume output. The average copy volumes reach 178,000 copiers per month. By 1997, analysts expect this volume to drop to about 162,000 copies a month as users move growing numbers of jobs to digital equipment with copying functions. Nevertheless, the copiers for central operations will account for more than 21 percent of all copied pages during 1997. Xerox dominated the central duplicating market with three times the models and four times the sales and service staff of Kodak. Xerox introduced network software tied its digital copiers to computers, allowing documents and books to be printed quickly from ones personal computer. This was Xeroxs attempt to keep central copiers from being replaced by electronic network printers, which can produce multiple originals at speeds of 22 pages per minute. Digital technology fit the needs of high volume users for either standalone or networked publishing demands. It increases central reproduction departments productivity while reducing idle time between jobs. While the first job is being imaged and output, the operator can program and scan another job, to be processed next. The reduction of down time between jobs will improve machine productivity. As much as 80 percent of desktop PCs are expected to be networked by the end of the 1990s. Networked versions of high volume output devices allowed large numbers of people to use a single output device. Oce also decided in 1993 to sell OEM to Alco Office Products for sales and service of Segment 6 machines. Their product was considered user friendly and reliable and fit in the decentralized high-volume environment that was appropriate for Alco dealers. It was Alcos first vendor relationship since prior souring was left up to individual dealers. Oce had never developed brand recognition in the U.S. and was prime for Alcos national sales and service network. Dataquest felt that it would allow Alco to become a major player in this market. Color copier sales in 1993 topped 9,000 units in the U.S. Over 60 percent were digitally connected to host systems in order to provide color copies in a network environment. This provides special advantage in the printing industry by providing proofs to clients before final offset-press versions are completed for printing or advertising customers. Customers also want to be able to send files to printing professionals either through modems or on some kind of disc-based digital medium that the printer could use when printing out data. Color laser printers were expected to enter this market in 1994 and 1995. Compared to the price of full color copiers with digital interfaces, color laser printers sold for as little as $4500 and were more affordable to a wider range of users. According to BIS, color laser printers sales will grow from 650 units in 1993 to 40,000 units in 1998. Printer vendors also watched profit margins dwindle for hardware. This trend affected all segments of the printer industry, from the low end (under 20 ppm) to the high volume segments. Hoping to sustain the flow of revenue, printer vendors began concentrating on selling consumables such as paper, toner, and developer in markets that generated a large volumes of prints. One such market was copier customers. Future winners were expected to be those companies that launched the most competitive products, improved productivity, and strengthened marketing power. Canon was one of the strongest, moving into laser beam printers, color digital plain paper copiers (PPCs) and bubble jet printers ahead of its competitors. As their installed base grew, high margin consumables such as replacement cartridges (toner and drums) generated profits for the company both in Japan and abroad. Japanese production of copiers and printers abroad had grown in the second half of the

negative or positive film. It features automatic focus, automatic negative and positive identification, a wide zoom range, and trimming. A larger unit also handles 6x6 inch and 8x10 inch films. This model prints negative film, and overhead transparencies. A front loading design draws from three 500-sheet cassettes plus a 50-sheet manual feed tray for originals as large of A3 and objects as heavy as 2kg. It also incorporates anti-counterfeiting functions.
Table 10: Canons Product Line
MODEL Canon PC-311 Canon PC-330 Canon PC-330L Canon-PC-6RE Canon-PC-7 Canon PC-11 Canon PC-11RE Canon PC-12 Canon NP-1020 Canon NP-1500 Canon NP-2120 Canon NP-3050 Canon NP-4050 Canon NP-4080 Canon NP-6030 Canon NP-6060 Canon NP-6650 Canon NP-6650E Canon NP-6650SF Canon NP-8530 Canon NP-9800 Canon NP-9850 Canon CJ10 Color BJ Copier Canon CJ7 Color BJ Copier Canon Color BJ Copier AI Canon Color Laser 300 Canon Color Laser 350 Canon Color Laser 550 Canon GP55 Multifunctional SPEED 0.69 0.65 0.30 PRICE $ 795 $ 795 $ 995 $ 1,295 $ 1,595 $ 1,685 $ 1,695 $ 1,795 $ 2,325 $ 3,085 $ 4,220 $ 6,655 $ 8,850 $ 11,800 $ 5,940 $ 23,235 $ 19,000 $ 20,165 $ 19,735 $ 26,865 $ 39,135 $ 74,000 $ 5,999 $ 4,495 $ 120,000 $ 20,400 $ 23,000 $ 52,400 $ 12,995 VOLUME TO 5,000 10,000 20,000 40,000 60,000 60,000 40,000 125,000 70,000 70,000 70,000 150,000 150,000 300,5,000 5,000 10,000 40,000 ALSO SOLD AS
Kodak Ektaprint 95 Kodak Ektaprint 90
Lanier 6483 Lanier 6583 Kodak 2085
Kodak Coloredge 1525 Kodak Coloredge 1550
Canon is also competing in printers, scanners and fax machines. Its flexible world-wide manufacturing system was decentralized and sourced many parts locally to keep costs down. Dealers were provided a full range of product and market support. In 1989, Canon USA was named manufacturer of the year by the National Office Machine Dealers Association, winning gold and silver medals in all nine areas of dealer support: product profitability, dealer relations, marketing and advertising support, and sales training and service. The company sold its personal copiers through all distribution outlets, from stationary and department stores to mail-order outlets. Sharp Corporation. Sharp entered the copier business in 1972. The company had been first to introduce a stationary platen on a desktop exposure type copier in the 1970s. As one of the top three copier makers, the company had 15% of the world copier market and 7.5% of the Japanese market in 1993. The companys product line is shown in Table 11. In the U.S., Sharps market share fell from 22.1% in 1993 to 14% in 1994. Sharp had total sales of $14.6 billion in 1994 with a net income of $311.7 million. Exports accounted for 49% of sales. In the 1980s, Sharp introduced its SF-750, a smaller and lighter copier. In the low-end market, Sharp developed

compact and affordable copiers with features found on larger machines. Its low volume copier sales had grown from 64,300 units in 1986 to 85,200 units in 1992. In the 1990s, the company introduced the SD-3075, a fast, high volume copier that won Buyers Laboratorys Outstanding Achievement Award for unmatched reliability for one million copies. In 1993, it introduced the worlds lightest personal plain paper copier. To minimize downtime, Sharp developed modular designs to shorten maintenance and repair times. To improve productivity, Sharp had the fastest first copy time in low volume copiers at 5.9 seconds.
Table 11: Sharps Product Line
MODEL Sharp Z-20 Sharp Z-27 Sharp Z-52II Sharp Z-57II Sharp Z-85II Sharp Z-88 Sharp SF-2010 Sharp SF-7320 Sharp SF-7370 Sharp SF-7800 Sharp SF-7855 Sharp SF-7900 Sharp SF-2022 Sharp SF-2027 Sharp SF-2035 Sharp SF-8875 Sharp SF-9400 Sharp SF-9800 Sharp SD-2060 Sharp SD-3062 Sharp SD-3075 SPEED 75 PRICE $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,000 1,100 1,399 1,500 2,350 2,195 2,950 3,650 3,995 4,850 4,895 5,595 6,795 7,695 15,450 19,450 22,500 28,500 37,950 VOLUME TO 2,000 10,000 10,000 15,000 15,000 25,000 30,000 40,000 50,000 60,000 70,000 100,000 125,000 150,000 175,000 ALSO SOLD AS Xerox 5201 Xerox 5306
Xerox 5280/5309/5310 Lanier 6413 Lanier 6514
Sharps newest Basic Series of copiers were considered the best in class, offering top quality copies at exceptional speed. Simplicity of the design made the copiers compact enough to be used by smaller organizations and were easy to use. Using developer in toner cartridges, Sharp solved the problem of having to continually replace developer - a process which required service and related delays. Sharps new basic copiers, such as the SF-2014, offered the best quality and speed for its class. A new developer system contained developer in nospill toner cartridges. With Sharps technology, the old developer is flushed out of the system and replaced with new developer resulting in higher quality, consistent copies every time. While it has an automatic shut off feature to save energy, the heat roller temperature is maintained to allow for 30 second restart. It also avoids misfeeds and resets the controls. Auto-start allows for programs to be set while another task is being accomplished. The model SF-2114 adds zoom/enlargement features. The model SF-2214, is a high quality model with a single-pass feeder. Paper jams are minimized with the use of doublefeeder rejecter rolls trap a second unnecessary document and keeps the copier from misfeeding. Toner replacement uses no spill cartridges. An easy to use display panel reduces mistakes and resets after a certain time interval. The three models weigh 26.2 kg, 26.7 kg, and 29.5 kg. Sharps CX-7700 analog color copier was the fastest in the market at 7.5 cpm, and cost $20,000, as compared to $15,000 for Ricohs 4 cpm color copier, or over $58,000 for either Canon or Fuji Xeroxs 5 cpm color copiers.

Sharp concentrated on selling in the personal and segment 1 copier markets in the U.S., segments 2 and 3 in Europe, and segments 4 and 5 in Japan. Sharp had six models in the personal copier segment, five models in segment 1, three models in segment 2, two models in segment 3, three models in segment 4, and one model in segment 5. Besides producing in Japan, segment 1 copiers are produced in Brazil, France, the U.K. and, by the end of 1995, in China. Segment 2 machines were produced in Brazil. Ricoh Company, Ltd. Ricoh began to produce copiers in the 1960s. Ricoh had $9.4 billion in sales $92 million in profits in 1994. Over 84 percent of sales were in office equipment, including facsimiles, printers, and copiers. Copiers were 66 percent of sales. Twenty five percent of sales came from abroad. Both sales and profits had been declining in recent years as the value of the yen increased. With a goal of automating the office, Ricoh produced the first digital fax machines in 1973, establishing the fax transmission standard for telephone lines. The company produced optical, chemical and digital components for its image processing products. Ricoh is one of only three companies, along with Canon and Mita, to make photoreceptors, the high value added component of copiers. Beginning in the mid 1980s, Ricoh went on the attack to overcome Canons first to market strategy. In 1984, Ricoh introduced 17 new models, including two high speed models that beat Canons to the market. Ricohs product line is shown in Table 12. Until 1982, Ricoh sold its copiers under the names of Savin and Pitney Bowes in the U.S. With the introduction of its own brand, the company began working to develop its dealer network and mass distribution system. Ricoh had become the second largest competitor in the U.S. by 1985.
Table 12: Ricohs Product Line
MODEL Ricoh DS320 CX Multifunction Ricoh FT3113 Ricoh FT3313 Ricoh FT4220 Ricoh FT4222 Ricoh FT4415 Ricoh FT4427 Ricoh FT4727 Ricoh FT5433 Ricoh FT5733 Ricoh FT5570 Ricoh FT5590 Ricoh FT6645 Ricoh FT6655 Ricoh FT6750 Ricoh FT7870 Ricoh FT8780 Ricoh FT8880 Ricoh NC305 Full-color Ricoh NC8015 Full-color Ricoh VT1730 Duplicator Ricoh VT2105 Duplicator SPEED PRICE $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 10,837 2,090 2,610 4,385 4,990 3,590 5,860 6,891 6,590 7,835 9,497 11,295 11,249 15,499 15,961 21,009 38,104 38,104 14,724 51,995 5,995 9,865 VOLUME TO 12,000 7,500 7,500 15,000 20,000 10,000 30,000 30,000 40,000 40,000 60,000 65,000 60,000 85,000 85,000 120,000 175,000 175,000 20,000 20,000 100,000 120,000 ALSO SOLD AS
Savin 9130 Savin 9130Z Savin 9020 Savin 9022 Savin 9150 Savin 9270 Savin 9330/Gestetner 2533Z Savin 9335/Gestetner 2533ZD Savin 7430/Pitney Bowes D743 Pitney Bowes M750/Savin 7500 Savin 9450 Savin 9550 Savin 9520 Savin 9710/Minolta EP 9720/Toshiba 7110 Savin 9080 Savin 9080RF/Toshiba 8050/Gestetner 2580 Gestetner 5303/AB Dick PrinTech 6120 Gestetner 5325/ABDick PrinTech 6520

ABDick 2012RE ABDick2018/7120 ABDick7226 ABDick7335 ABDick7445 ABDick7455 ABDick7455RDH ABDick2060 ABDick7463 ABDick2070 ABDick7577
Konicas new CS-PRO 6192 is a small but powerful machines capable of large volume copying at 92 cpm. It makes the first copy of a run in 3.3 seconds. Up to 9,999 copies can be put into memory, allowing for interruptions for small tasks. It can remember up to 25 different settings and holds up to 7,500 sheets of paper. It can automatically adapt toner applications to different paper types. It feeds 100 originals a minute, while offering 100 percent efficiency in copy output. It can also copy two originals onto a single sheet, or two sided originals onto two-sided copy sheets. The photo mode evaluates variations in density and sets the correct amount of toner. The touch sensitive control panel used a full-dot LCD for conversational operations. Custom selections include copy quantity, density, magnification, and size. Mixed sizes can be stacked together without resetting the machine. The automatic magnification selection function matches
specified zoom ratios with multiple sizes of originals. Frame erasure deletes shadows that some copiers leave around the borders of a copied page. The automatic reset function designates a specific setting after a designated period of time. A power saving key put the machine in a low power mode until controls are retouched. The front loading paper trays hold 2,000 sheets, plus two 500 sheet paper trays make paper loading fast. An optional paper feeder unit stores two 2,000 sheet trays sandwiching one 500-sheet tray. The resulting 7,500 capacity handles large volume production. The copier comes with photo and text modes. Sorter hold up to 21 copies of 50 sheets and have in-bin stapling functions. Konicas National Customer Support Center solves customer problems and arranges for on-site repairs. The company provides loaner machines if a unit cannot be serviced in the field. This has been key to Konicas success in mid-range machines. According to one industry publication, If we could pick only one mid-volume copier vendor to look at, right now wed go for Konica. Konicas Technical Support Group was awarded the top ranking by Office Products Analyst for the fifth consecutive year for its training, engineering, technical publications, hotline and field support, and parts distribution. Konica was awarded manufacturer of the year gold medals by the National Office Machine Dealers Association for 1992-1994 in such areas as advertising support, sales training and support materials, administrative support, parts support, long term profitability of line and fair equitable agreements. Table 14 shows the competitive rankings for service.
Table 14: Supplier Support Ratings

Minolta EP 8600/Olympia 6001 Minolta EP 8602 Pro Minolta EP 9760
For segment 1, Panasonic had six new new 80-Series copier models that included digital microprocessor with neuro-fuzzy logic controlled copier functions through an array of sensors to determine exposure, voltage, and toner density. The result was stable, fine-quality copy images with dense, solid blacks, clean edges, and sharp image reproduction. The FP-1680 made 16 copies per minute, while the FP-4080 delivered 40 cpm. Optional sorters were 10 to 20 bins. The 20 bin system had a staple sorter. The modular front-loading design featured 250 sheet paper drawers for A3 to A5, plus 50-sheet bypass feeders, with optional paper drawers with up to 2,000 sheets. The FP-1680, 1780 and 2080 were rated as above standard reliability by a Office Products Analyst survey. These copiers had an average retail price of $3,136. For segment 2, Panasonics FP-2680 model, part of the 80 series, operated at 26 cpm and included reduction, enlargement, and zooming features. The environmentally friendly machine was quiet, low dust and ozone emitting, and used recycled paper with its organic photoconductor drum with a capacity of up to 2800 sheets and automatic duplexing. For segment 3, Panasonics FP3280 and 4080 included automatic document feeders, 20 bin staple sorters, supermagnefication, and a multicolor option. The FP-4080 won the Hansons Guidelines gold Medal for Superior Copy Quality. It was also ranked as best in average number of copies between service calls, with the FP-3380 coming in second. For segment 4, there was the FP-7450 model. On January 3, 1995, Panasonic introduced the FP 7160 copier into segment 4. It used touch screen display to control its 60 cpm speed. Panasonic used Minoltas products to fill its line, as is done by 80 percent of the competitors. For segment 5 Panasonic included the FP-7650. Panasonic redesigned its factories to produce the new 80 series copiers. Production comes from factories in Japan and Germany bearing ISO9002 certification. Panasonic produced its own copiers, except for the FP 7160/7650 which were purchased from Minolta. Canon, Minolta, and Pitney-Bowes all use Panasonic copiers to fill their low end market segment gaps. Panasonic produced approximately 70% of its copier components in-house and supplied components to Canon and Minolta. Panasonic had only 325 active U.S. copier dealers. It had begun to incorporate master dealers in central locations to support areas that with poor market share. With this central dealer system, the companys exclusive branch dealers enjoyed lower overall product costs to increase sales volume and promote expansion. The dealer service agreements consisted of either regular service, full service, or total maintenance service. The regular service agreement included parts and labor, but not supplies, for.9 cents per copy. Full service included everything

also introduced multifunctional machines with fax, print, and copy capabilities for $1795, that sell for as little as $1295. Xerox invested 6.6% of sales in R&D.
Table 21: Xeroxs Product Line
MODEL Xerox X-NOTE Xerox 5201 Xerox 5203 Xerox 5305 Xerox 5205 Xerox 5210 Xerox 5306 Xerox 5220 Xerox 5760 Xerox 5760ADF Xerox 5765 Xerox 5775 SSE Full-color Xerox 5240 Xerox 5260 Xerox 5309 Xerox 5310 Xerox 5280 Xerox 3010 Multifunction Xerox 3010ED Multifunction Xerox 5313 Xerox 5011 RE Xerox 5012 Xerox 5312 Xerox 5014 Xerox 5314 Xerox 5016ZT Xerox 5018 Xerox 5016ZTA Xerox 5018Z Xerox 5016 ZTAS Xerox 5318 Xerox 5320 Xerox 5322 Xerox 5021 Xerox 5028 Xerox 5328Z Xerox 5028Z Xerox 5034ZTA Xerox 5334 Xerox 5335 Xerox 5042 book copier Xerox 5046 Xerox 5340 Xerox 5345 Xerox 5050 Xerox 1050 Xerox 5350 Xerox 5053 Xerox 5052 Xerox 5355 SPEED 1.6 7.55 PRICE $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 29,750 31,580 31,750 47,500 1,295 1,949 1,049 7,295 8,195 1,599 1,695 2,540 2,540 3,115 3,115 2,995 3,325 3,995 4,185 4,995 3,710 4,265 7,400 4,505 4,755 5,375 5,540 8,300 9,235 8,900 9,470 9,670 11,900 16,275 11,095 12,650 16,800 18,775 15,990 20,625 VOLUME TO ALSO SOLD AS 10,000 10,000 10,000 30,000 1,000 1,000 1,500 1,500 1,500 3,500 3,500 2,000 3,500 10,000 10,000 10,000 10,000 20,000 20,000 20,000 20,000 20,000 10,000 10,000 10,000 20,000 30,000 30,000 30,000 30,000 30,000 45,000 40,000 45,000 50,000 65,000 65,000 65,000 50,000 65,000 65,000 65,000 QuadMark PassPort Sharp Z-20 Sharp Z-23/25

Sharp Z-27 Sharp Z30

Sharp SF-Z55 Sharp SF-Z75 Sharp SF-2010 Sharp SF-2010 Sharp SF-2010

AB Dick K357

AB Dick K555

AB Dick K557

MODEL Xerox 5065 Oct Xerox 5065 Fin Xerox 5365 Oct Xerox 5365 Fin Xerox 1075 Xerox 5380 Xerox 5385 Xerox 1090 Xerox 5388 HCS Xerox 5388 Fin Xerox Docutech 90 Xerox 5100 Xerox 9500VR Xerox 9500 Xerox 9900 Xerox 5090 Xerox 5390 Xerox Docutech 135

SPEED 135 135

PRICE $ 27,600 $ 29,495 $ 28,100 $ 29,995 $ 31,575 $ 37,495 $ 41,495 $ 63,100 $ 75,950 $ 79,000 $ 160,000 $ 99,500 $ 85,000 $ 86,400 $ 104,775 $ 154,000 $ 154,000 $ 245,000
VOLUME TO ALSO SOLD AS 125,000 125,000 125,000 125,000 200,000 150,000 150,000 400,000 400,000 400,000 500,000 400,000 100,000 100,000 1,000,000 1,000,000 1,000,000 1,000,000
Changing Distribution Structures As a consequence of shrinking gross profit margins on sales transactions, dealers have moved further up volume in their territories, de-emphasizing the sales of low-end copiers. It was not unusual for a dealer to instruct sales representatives not to prospect or make cold calls for lowend units. Rather, low-end units should only be part of a larger, more lucrative sale. If a large order includes low-end copiers, dealers will fulfill the order, but they will not prospect for low-end business. As sales representatives effectively exit from low-end sales, new dealer placements in the low end of the market will further decline. User Maintenance. Based on experience in the low-end printer market, users were capable of replacing items such as corona wires and wiper blades when these items are provided in a prepackaged preventative maintenance kit and sold over the counter. The combination of long-life photoreceptors and user repair allowed copier vendors to provide user maintained maintained of low-end copiers. Obviously, user maintenance further eroded the dealers ability to sell maintenance contracts into low-volume copier applications. The Office Products Analyst, a monthly newsletter devoted to the cost/performance analysis of office products, conducted annual copier reliability studies based on input from 212 copier dealers. Kodak, Xerox and Pitney Bowes - companies distributing only through their own direct sales forces - were not included. The results shown in Table 22 identify the recommended purchase list from the survey results. The speed in cpm, the retail price, the maximum copy volume, and the reliability measure (100 is best) are listed. The bold print represents the best in class models as selected by the independent dealers representing Japanese manufacturers. Many of the models were also sold OEM to other firms. Falling Dealer Profit Margins. Because the Japanese manufacturers relied heavily on independent dealers to bring copiers to market and because many manufacturers set up distribution systems with overlapping territories, dealers were accustomed to competing on price. Price competition was fierce in low end markets where it was an important buying factor. Price discounting lowered margins on low-end copiers to the point where profits were nonexistent in some transactions. For example, in Segment 1, a salesman may discount as deeply as 30 percent off the suggested retail price of the product. If that product had a gross profit margin of only 45 percent, that would leave only 15 percent gross margin. By the time the dealer paid a direct sales

representative a selling commission and covered administrative, installation, warranty, and inventory carrying expenses, the dealer probably made no profit on the sales transaction. In order to make a profit, the dealer would need to maintain the service and supplies business for this unit throughout its useful life.
Table 22: Recommended Purchase List
MODEL Canon CJ10 Color BJ Canon NP-1020 Konica 1112 Minolta EP 3170 Panasonic FP-1780 Panasonic FP-2080 Minolta EP 4210 Panasonic FP-2680S1 Konica 2028 Minolta EP 5320 PRO Panasonic FP-3280S1 Mita DC-3755 Panasonic FP-4080S1 Minolta EP 5420 PRO Ricoh FT5570 Ricoh FT5590 Canon NP-6650 Mita DC-5685 Konica 6090 Sharp SD-2060 Mita DC-6090 Sharp SD-3062 Konica 4065 Mita DC-7090 Konica 5080 Canon NP-8530 Mita DC-8585 SPEED 0.85 $ 28,500 $ 21,990 $ 20,995 $ 26,920 $ 26,865 $ 33,995 PRICE $ 5,999 $ 2,325 $ 2,300 $ 3,750 $ 3,795 $ 3,995 $ 4,895 $ 7,653 $ 5,880 $ 7,535 $ 8,653 $ 6,595 $ 10,232 $ 8,675 $ 9,497 $ 11,295 $ 19,000 $ 16,995 $ 19,560 $ 22,500 VOLUME 500 5,000 5,000 20,000 15,000 20,000 25,000 25,000 40,000 50,000 35,000 45,000 50,000 80,000 60,000 65,000 70,000 75,000 150,000 125,000 100,000 150,000 150,000 100,000 150,000 150,000 200,000 RELIABILITY 93 85.5 88.5 87.6 86.3 86.4 86.5 85.6 86.1 86.2 85.8 85.6 87.5 88.7 85.5 85.0 91.0 85.9 87.1 88.7 85.6 89.0 86.0 85.0 87.1 88.1 88.2 ABDick7463 Pitney Bowes 9070 ABDick7577 Lanier 6483 Gestetner 2485ZDF/ Olympia 4200 Savin 9335/Gestetner 2533ZD Savin 7430/Pitney Bowes D743 Kodak Ektaprint 90 Pitney Bowes 9056/Gestetner 2356ZDF ABDick2060 Monroe RL-937/Gestetner 23337Z Olympia 2100 Pitney Bowes 9326 ABDick7226 Olympia 3201 Lanier 6717/Pitney Bowes 9317 ALSO SOLD AS
Alternative Distribution Channels. In the channel mix for 1993, dealer and distributor outlets accounted for more than 50 percent of all sales. As dealers look askance at cold-calling for very low-end placements, manufacturers are forced to employ discount and retail outlets for lowend copiers. With permanent photoreceptors, user maintenance, and lower profit margins, the lowend copier was being sold through alternate distribution channels. Without the need for a service technician to set up the machine, the machine can, indeed, be sold off the shelf in a retail environment where selling expense is relatively low and deep discounting can be maintained. As product prices declined, and performance improved, a growing number of channels to sell copiers will provide new ways for customers to generate copies. While segment 1 sales were actually up in 1993, one manufacturer tried to increase its share of the dealer market by discounting its price to dealers. Other manufacturers pushed products through distributors and low-volume dealers to maintain the unit volume placements in segment 1. Dataquest predicted that alternate channels of distribution would expand. From now on, alternate channels will begin eroding the share of the copier business that dealers and distributors now hold as shown in Figure 1.