Epson Continues Seeking to Displace Laser with High-Capacity Inkjet
As it continues to develop offerings for the business-inkjet printer market, Seiko Epson of Tokyo, Japan, outlined its latest corporate – and inkjet – strategy in its Mid-Range Business Plan released today.
For its Printing Solutions group, Epson stated that in both the SOHO and office segments, it’s continuing to transition away from a business that’s reliant on consumables (ink cartridges) by “accelerating the displacement of laser printers and ink-cartridge printers” with high-capacity ink models such as Epson high-capacity refillable ink-tank printers, as well as high-speed line-head inkjet copier/MFPs for high-volume office use.
In the commercial- and industrial-printer segments, Epson says it will “rapidly expand” its lineup of products through collaboration with partners, as well as through sales of inkjet print heads to partners. Last, it hints that it will create “new printing services.”
Epson stated that it will work to strengthen global sales company functions under its head-office control, as well as strengthen its B2B solution selling.
Epson’s financial targets are as follows:
|FY2018 Outlook*1||FY2021 Target|
|Revenue||¥1,070 billion||¥1,200 billion|
|Printing Solutions||¥710 billion||¥780 billion|
|Visual Communications||¥198 billion||¥225 billion|
|Wearable & Industrial Products||¥162 billion||¥195 billion|
|Business profit*2||¥65 billion||¥96 billion|
|ROE||9.5%||Sustain over 10%|
|Exchange Rate USD/EUR/Other*3||¥110/¥127/92||¥110/¥125/92|
Reference: FY2025 Target
|FY2025 Target||Revenue||¥1,700 billion|
|Business profit*2||¥200 billion|
|Exchange Rate USD/EUR/Other*3||¥115/¥125/100|
Developing Robotics as a Core Business
One of Epson’s goals is to develop its robotics business as a core business, via investment and collaboration with others. It says it will also use artificial intelligence to further improve usability.
Like most Japanese printer/copier companies, Epson is not only redefining and expanding the role of its printer/copier products into commercial printing, but continuing to diversify its business. For Epson, this includes expansion of its robotics, projector, and wearable tech businesses. For others, such as Canon and Konica Minolta, this diversification includes expansion into medical technology, for example.
Epson’s strategy in the inkjet printer market has been to gradually transition its business model from low-priced consumer models that require high-priced ink cartridges (the “razors-and-blades” model), to higher-priced models optimized for business and with lower-cost consumables and operation. The sales proposition for these new models is that, although they cost more up-front, in the low-run, they cost less because their consumables are priced much less. (However, we note that in order for customers to justify a higher upfront costs, their print volume must be high enough to recoup their higher upfront cost. Customers who print at lower volumes will have difficulty recouping their higher upfront investment.)
Epson published its most recent financial results in January, for its third fiscal quarter (the nine months ending on December 31, 2018), reporting virtually flat results: revenue was down 0.5 percent to 829.0 billion yen, and business profit at 58.0 billion yen was essentially the same, with both versus the nine months a year earlier.
For this period, sales for Epson’s Printing Solutions business were down 9.8 billion yen to 201.7 billion yen versus the same period a year ago. Printer sales were down 11.8 billion yen to 143.8 billion yen, with inkjet models making up 85 percent of those sales. However, sales for Epson’s Professional Printing group were up 0.7 billion yen to 53.1 billion yen.
- January 2019: Epson Revenue, Profits Flat in Latest Financial Results
- January 2019: Epson Expands Business-Inkjet Family
- February 2019: Epson Expands Voice-Activation for Consumer Printers
- December 2018: New Epson Print Admin Serverless for Epson Workgroup MFPs and Printers
- October 2018: Epson Reports Latest Financial Results
- October 2018: New Epson Replaceable Ink Pack Printers, Epson PrintAdmin
- September 2018: New Epson Tech Center to Showcase Epson Printing Solutions for Dealers, Customers