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Cheaper PCs Continue To Drive Printer, Scanner Sales

As prices on personal computers reach new lows, the markets for printers and scanners are hitting unprecedented highs.

The fact that prices on peripherals have dropped almost as dramatically as those on PCs is a contributing factor as well. What’s more, as with computers, today’s printers and scanners are offering more features than ever before, even at the lower price points.

“Printer sales are up dramatically,” said Paul Johns, VP of sales and marketing for Lexmark’s consumer printer division. “Unit sales are projected to show an increase of over 39% at the end of 1999, which illustrates extremely strong growth. At the same time, even though average selling prices have dropped by about 19%, revenue is up, as well.”

The surge in PC sales is certainly a major driver of the printer market, Johns said, citing the under-$600 price segment as the most rapidly growing portion of the PC market.

Fueled by that low-cost segment, PCs grew from about a 35% household penetration at the beginning of 1998 to a nearly 50% penetration by the end of last year. And with the aggressive price competition and free PC offers being made by Internet service providers, penetration could reach as high as 80% in the very near future, he added.

“Every household that buys a new computer needs a new printer,” said Johns. “In fact, we’ve seen that when a consumer buys a PC that is not bundled with a printer, usually within two weeks the consumer is back in the store to buy one.”

While scanners are not a “must-have” purchase for computer owners, these devices are enjoying strong growth as well. Part of the impetus is the significantly lower price points on good quality scanners, but another part is the growing consumer comfort and desire to do more with their PC applications.

Anna Jen, director of photo imaging products for Epson, said, “The growth in photo-quality inkjet printers is actually one of the enablers of sales of scanners. People want to be able to print their own photos, or insert them into their e-mail. That trend is driving interest in a variety of input products such as scanners and digital cameras.

Jen pointed to USB as another major trend. “I can’t say enough about how USB is making it easier for consumers to add peripherals and is definitely helping to fuel their growth,” she said.

“Over the last year or so, consumers came to expect faster, better and cheaper from peripherals, and most manufacturers provided them with that,” said Rosemary Thomas, Xerox’s VP/general manager, North America. “The quality of the output, whether an inkjet or laser printer, is much better; and even on multifunction machines, where consumers used to compromise on features to get the benefit of an all-in-one device, there’s no compromise on quality any more.”

Illustrating that point are some of the introductions from key vendors in the printer and scanner categories for 1999. The new Stylus Color 900 inkjet printer from Epson, for example, offers speeds of 12ppm in black & white and 10ppm in color, plus networking capability and FireWire connectivity, for about $399.

Similarly, Lexmark’s new Z series Color Jetprinters raise the bar across a variety of price points. The opening price point Z11, offering 1,200 x 1,200dpi and the company’s Accu-Feed paper-handling system, has a street price of $49 after rebate.

At the upper end, the Z51 offers the same resolution and paper handling, plus speeds up to 10 ppm in black & white and 5 ppm in color, and a new microscopic ink droplet technology for photo-quality output even on copy-grade paper. After rebate, the Z51 sells for approximately $199.

On the scanner side, a new Epson flatbed model incorporates resolutions of 1,200 x 2,400 dpi, at a price of about $249. The company’s Perfection 1200 Photo model includes a transparency viewer that enables users to scan photo negatives and create prints.

In multifunction machines, the brand-new WorkCentre series of all-in-one devices from Xerox offer a color inkjet printer, flatbed color copier, and color scanner in an easy-to-use, space-saving design, starting at $349.

In addition to the quality, features, and low pricing pervading the printer and scanner marketplace, manufacturers are creating value-added programs or benefits for their peripherals.

Rajeev Mishra, Epson’s director of product management for consumer inkjet printers, said, “We’ve begun the Epson Software Choice program, initially on our Stylus Color 900 printer but to be expanded to other products as well, which offers consumers their choice of 13 full-featured software titles when they buy our printer.

“Rather than simply bundling our own selection of software with the unit, they can pick two titles from the list and receive them for just the shipping and handling fee of $7.95. Response so far has been overwhelming,” he continued. “Not only does it allow consumers to pick the software they know they’ll use and enjoy, but it increases their satisfaction with our product.”

On a slightly different note, Xerox has introduced two inkjet printers — the DocuPrint C8 and C11 — which come bundled with free, unlimited Internet access from NetZero, a California-based Internet Service Provider.

“We think consumers will start looking for value-adds when they shop for peripherals,” Thomas said. “So in the case of the C8, our first sub-$100 printer for SOHO customers, they’ll pay $99 after rebate for the printer, but they’ll get free Internet access on a CD-ROM right out of the box.”