Low scan rate

During FY 2005-06, the cannibalization effect started in full swing and had a
strong impact on the shipments of scanners. This trend is not limited to India
only as globally scanners are losing their sheen. Dri­ving this change without
doubt is the multi­function device (MFDs) and their all in one capa­bility in
wooing the buyers to opt for MFDs instead of scanners. The impact was felt to
the maxi­mum extent on entry-level scanners, which once was a thriving market
when printers used to be predo­minantly single function. But since 2003, MFDs
slo­wly started making their presence felt and provided ample pointers of an im­pen­ding
impact on stan­dalone input devices.

According to vendors like HP, slowdown is an inevi­table reality in the
scanner market. While it's reasonable to expect that scanner sales will
plateau, scanning itself will become all pervasive, going from conventional
image scan­ning to hard copying, fax­ing, and document mana­ge­ment
applications.

A look at the shipments over the year indicates volumes heading south. For
instance, during FY 2005-06, according to IDC India, scanner market shipments
stood at 157,873 units valued at Rs 105 crore. This repre­sents a decline of
nine percent in unit terms.

While the mainstream scanner market faces touch times ahead, the high-end
production scanners have entered a separate market segment.

MFDs vs Scanners: Value Proposition

When analysts talked about the impending cannibali­zation effect MFDs will
have on single-func­tion output devi­ces, the ass­er­tion was brus­hed
aside as too forw­ard looking. But a look at the scanner market clearly proves
that MFD canni­balizing other output devices has started hap­pe­ning. In the
printer space, inkjets have started facing the onslaught of MFDs. Inkjets, for
instance, that have been pos­ting flat values over the last two years, showed
mar­ginal decline in volu­mes for the first time. Clearly, the current market
dynamics foretell the trends ahead.

For one, vendors will find the going tough in projecting the USP of
single-function devices because with a marginal additional cost, a consumer
would prefer a MFD that can print, scan, and copy. With inkjet MFDs beco­ming
highly affordable over the year with prices brea­ching the Rs 5K mark, a
consumer intending to buy a scanner at Rs 3K might opt for a MFD. Still, ven­dors
are hopeful that ex­clusive consumer needs -including quality output and
special tools to enhance the image - will drive the demand for standalone
devices like scanners.

Shrikanth G

shrikanthg@cybermedia.co.in