mind the gap: blog

The A4 MFP Revolution and Its Channel Challenge

One of the most prevalent hardware storylines in recent years has been the increased emphasis placed on A4 MFPs among A3-centric manufacturers and within A3-dominated channels.  This A4 MFP revolution has largely come from traditional “copier” players expanding their lineups in an effort to achieve better portfolio balance, capture more page and placement opportunities, and regain share within their multi-line dealers.  This trend has also been driven by traditional “printer” players launching BTA-targeted A4s that cater to dealers’ cost/billing structure and channel exclusivity preferences, and allow these manufacturers to expand beyond their traditional open distribution channels.

As a result, the total number of active A4 mono and color MFPs targeting the BTA channel has increased by 50% and 45%, respectively, since the start of 2010.  Meanwhile, the BTA channel has seen the overall assortment of active A3 MFPs flatten out and the number of available B&W A3 MFPs has actually declined.


The above A4 MFP portfolio expansions have resulted in impressive A4 unit growth from a number of historically A3-centric vendors.  And although part of the reason that this unit growth has been so impressive is because these vendors’ A4 sales were previously very very low, recent manufacturer statements and ongoing A4 MFP lineup expansions suggest that the “copier” guys plan to maintain this A4 momentum into the future (side note: role of “A4 specialist” brand is in peril).

The A4 Channel Challenge

Based on this evidence, the continued sales growth of A4 MFPs from “copier” brands and within “copier” channels seems like a done deal, but there’s a catch.  The A4 growth seen so far has either been generated from channels that the manufacturers can control (direct) or from channel partners that have already embraced A4 MFPs, but there is a big portion of the BTA channel that is not nearly as excited about A4s as their OEM suppliers for a number of reasons:

Low Price / Low Gross Margin / Low Commissions – Everyone in our industry is in the page business, until you ask a dealer about A4 MFPs and then there is a good chance that he or she will adopt a hardware-centric philosophy very quickly.  After years of selling $10k+ A3 MFPs, many BTA dealers have a hard time wrapping their mind around the idea of chasing $3k deals with minimal hardware gross profit contributions and commissions that they fear are low-enough to make sales reps update their LinkedIn profiles.  Combine these issues with the role that leasing and hardware commissions play in the sales process and it’s safe to say that dealers are pretty hung up on A4 MFPs’ low hardware pricing.

Durability Concerns – It’s not just the sales guys that have beef with A4 MFPs, service managers are still feeling the burn from a number of shaky first generation “copier” brand A4s, and are quick to remind their sales team and management of their engine preferences.  Or at the very least, they make sure reps are careful not to over-place A4s in higher print/scan volume environments.

eCom / VAR Alternatives –  One of the great advantages of A3 MFPs in the eyes of “copier” dealers has always been channel exclusivity, both in terms of product/supplies availability and the overall superior capabilities of A3 MFPs.  This remains true, as you could count the number of A3 MFPs on CDW.com that could compete head-to-head with a BTA-exclusive model on one hand.  Unfortunately, A4 MFPs do not offer this advantage, as well-equipped A4s are abundant in online channels and many open distribution A4 models can meet or beat just about any copier brand A4 MFP available today.

Feature / Value Conflicts – Even the dealers who have positive views of low-priced A4 MFPs, and see them as a key way to win more deals and grow their fleets, have complaints regarding A4 feature sets, often noting that A4 MFPs’ ADFs are too flimsy, their panels are too small, their solutions support is insufficient, and their finishers are too limited.  To quote just about every channel sales manager ever, dealers can be hard to please…


That’s a lot of challenges, but the important thing to note is that everyone is right in their own way.  The A3-centric manufacturers are right to accelerate their entrance into the A4 MFP segments, and the dealers that are pushing back are right to recognize that this shift will not fit nicely into their established business models.  Good thing gap intelligence is here to help guide everyone in the right direction.

gap’s Message to Dealers

We get it.  You built your business on selling high-priced A3 MFPs that generally offered functionality well beyond your customers’ needs.  Why mess this up by pushing low-priced and less-equipped A4s at the expense of your business model and at the risk of your prioritized A3 product line?

Because you have to, that’s why… The fact is, office page volumes are falling, jobs lengths are getting shorter, and the idea of paying $10k+ for an MFP with an ROI based on high page volumes is going to be less attractive to your customers as time goes on – no matter how much you’d prefer to sell a $10k MFP rather than a $3K model.

I’m not telling you to make a complete shift to A4-size devices right away, but it’s certainly time to start integrating A4 MFPs into your offering at a greater rate, even in scenarios where you could have gotten away with an A3 sale.

That’s right.  It’s time to start cannibalizing your A3 sales, at least while you can still work on your A3 cannibalization recipes and control your A3 portion size.  For all of the companies that have benefited from avoiding cannibalizing their core products, there is a longer list of companies that have paid a steep price for “successfully” avoiding cannibalization.   Apple cannibalized the iPod with the iPhone (huge success!), risked cannibalizing the Mac with the iPad (huge success!), and by the end of the year will probably try to cannibalize all of its devices with its new smartwatch (we’ll see…).  On the other hand, Kodak invented the digital camera, but was among the last vendors to move to digital in fear of stepping on its film business, and now gets compared to companies like Apple in blogs like this.

I probably don’t have to say it, but in this case, it’s wise to be more like Apple.

gap’s Message to Manufacturers

Realistically, some dealers are going to embrace A4s and some are not, but there is a lot that you as manufacturers can do to maximize your A4 expansion efforts and drive adoption.

First off, it’s important that you segment the market, or in this case the channel, and understand the needs and opportunities present within what we see as the three general A4 MFP dealer types:

A4 MFP Deniers - The channel’s A4 MFP Deniers are box pushers through and through. They will always look for a reason to propose an A3 MFP, they see almost no financial benefits in A4s, and at best will only sell an A4 as a last resort.  You could invest in trying to change their minds, but considering that these dealers are generally also the ones dragging their heels on evolving/diversifying through solutions, MPS, and other services, I wouldn’t suggest spending too much time or money on it.  They’ll come around when the market forces them.

A4 MFP Pragmatists –These guys are really starting to understand the benefits of A4s and see them as a great way to win deals and grow current accounts, but will still generally lead with their core A3 lines.  In fact, they basically have the same strategy as the copier manufacturers who are now trying to sell A4s to them, so work with them on that level and just make sure you are their portfolio partner – not just their A3 supplier.

A4 MFP Enthusiasts – Also known as VARs, these resellers …. Just kidding!!!  There actually are some BTA dealers that will tell you that they truly are enthusiastic about A4 MFPs.  They understand the client-centric logic of A4s, they “get” the low-hardware / high-CPC benefits, and they love the competitive advantage of approaching a deal with an A4 MFP or a mixed fleet of A4s and A3s knowing that competing dealers are going to try to push as many A3s as they can.  These guys don’t need much convincing, other than that they should be trying to sell your MFPs, rather than another vendor’s.

It’s also important to try to hold off on any mixed messages related to A4s.  There are more than a few OEMs out there who are pushing A4s with the caveat that they are intended to protect and create opportunities for A3 MFPs, and should never sell as a replacement or alternative to A3 MFPs.  Nearly every dealer already understands that A4 strategy, so even at the risk of sounding too touchy feely, we suggest that you instead focus on the benefits of A4 MFPs to their customers and how A4s can create opportunities to win more fleet deals and expand their current accounts, leaving your own A3 baggage out of it.  Understanding that it’s not a coincidence that nearly every manufacturer’s A4 MFP ceiling is just below their lowest-priced A3, we also suggest that vendors start planning for the day when the A4/A3 border moves higher, or even begins to overlap.

gap’s Closing Message

As you can probably tell, we feel strongly that the A4 segments represent a growth opportunity for vendors and dealers that have traditionally focused on copier-based A3 MFPs.  In fact, having a balanced fleet is now a competitive requirement regardless if your legacy is in A4s or A3s, and given the direction we’re heading as an industry, we believe everyone needs to think a lot more about how to meet the evolving needs of their customers, and less about what worked back when our industry was a lot more siloed.  You don’t have to be Darwin to understand that those in our industry who are the most adaptable will be best positioned to thrive into the future, and it’s pretty much a guarantee that the whole A3 vs. A4 hardware debate is one of the more straightforward adaptation challenges we’ll face, so dealers and manufacturers who have not done so already better get started there.

Posted in gapIndustry, look who's talking, mind the gap: blog | Tagged , , , , , | Leave a comment

HP Commits to Instant Ink Program with Expansion of Pro Service

Earlier this year, HP announced an expansion to its Instant Ink program with Instant Ink Professional. The professional leg of the program is for the company’s Officejet Pro X printer line, which was originally announced in February 2013. Instant Ink has been a huge area of focus for the OEM since its September 2013 launch nationwide at Best Buy stores and expansion to all major office supply stores, Walmart, and Micro Center. While the idea of changing the way that people purchase ink was initially viewed as aggressive and an upward battle, HP has proven that it is committed to the program and looks to expand it further. The result of that is Instant Ink Professional.


Like its counterpart, Instant Ink Pro offers customers three subscription options depending on their monthly page volume. The savings on the Professional program is touted as up to 25% compared with HP’s claim of up to 50% savings on the traditional Instant Ink program. Despite the lowered potential savings, customers gain a significant amount of convenience with the program, which will speak highly to SOHO customers. The program is currently compatible with the Officejet Pro X476dn ($649), Officejet Pro X476dw ($699), and Officejet Pro X576dw ($799).


The overall program works very similarly to the traditional Instant Ink offering, with the printer notifying HP when the ink is low and the company sending out new tanks. Customers are required to send back the empty cartridges in the provided postage-paid recycling envelopes. HP claims that all returned cartridges will be recycled by its HP Planet Partners program. Billing does not start until 30 days after a customer has installed a HP Instant Ink Professional tank into the enrolled printer. Similar to the traditional Instant Ink service, there is no long term commitment or obligation to remain with the Instant Ink Professional program beyond the first month. Customers can change their plan at any time at hpinstantinkpro.com.


Under the Instant Ink Professional program, users are billed based on the number of pages printed regardless of the number of monochrome or color pages, a feature that will likely be very attractive to customers. For small businesses, this billing model will be important as they do not have to choose to print black and white pages in an effort to cut costs.

HP’s efforts with Instant Ink clearly demonstrate the vendor’s commitment to the program by moving it upmarket. The OEM’s program also shows its evolving efforts to combat third party competition in both its consumer and SOHO product lines. While HP’s PageWide technology was touted as very difficult to duplicate, there are several sources stating that refills or other options besides genuine HP ink are becoming available for the hp970/971 line. HP is leading the way in terms of offering new inkjet technology and is positioning itself as a serious force to be reckoned with, bringing concern, at the very least, to several laser device manufacturers. By offering an easier way to replenish supplies, HP is addressing and anticipating areas that can be improved in the overall user experience.

Also demonstrating its commitment to the business model, HP recently expanded the original Instant Ink program to the UK where it has been under beta testing. The program will resonate best with customer bases that are familiar with monthly subscription plans. In today’s age, there are several items that consumers obtain with monthly subscriptions, for example, Netflix or Amazon services. With that, the UK was identified as the next place to go with Instant Ink and has thus far proven successful as HP announced the official launch this week within the country.

HP’s efforts for evolving its inkjet printer business have included both technological advancements as well as customer-facing sales strategies. The company relies heavily on supplies revenues and is seeking ways to capture more prints overall. While the exact details of how HP makes its money on the Instant Ink program are undisclosed, the company does state that its cartridges for the program are larger than the extra-large versions sold in stores, giving HP the opportunity to save on manufacturing costs overall. It is unknown if HP will sell its enrollment kits within resellers for its Pro program as it has done with the original Instant Ink program. At this time, online reseller CDW is the only outlet currently listing the Instant Ink Professional enrollment kit. It is likely that other online resellers will follow suit in the near term.

While HP is currently the only major inkjet manufacturer to offer this type of service, it remains to be seen if the company can move enough of its business to the program for it to uphold in the long term. Other players in the industry are continuing to rely on traditional sales channels for the current time, but may eventually seek alternatives as purchasing habits continue to evolve.

Posted in gapIndustry, mind the gap: blog, Uncategorized | Tagged , , , | Leave a comment

Inkjet Manufacturers Continue to Grow in A3 Business AiO Segment

In April, I wrote that vendors are looking to the A4 SOHO inkjet AiO segment as a place to grow their business. As it turns out, inkjet manufacturers may also be looking to the low-end A3 business inkjet segment as an avenue of growth. With that, inkjet manufacturers will continue to focus their efforts on both A4 and A3 business inkjet segments as demand for consumer inkjets continues to decline.

In an effort to drive demand for A3 business inkjet AiOs, vendors are increasing placements for the devices at the retail level. From May 2010 to May 2013, A3 business inkjet placements have demonstrated significant growth by doubling in retail placements from 9 to 18. Since that time, placements for the segment have remained relatively steady.


Similar to an increase in A3 business inkjet AiO placements over the years, vendors are allocating more resources to advertisements in the segment. gap intelligence data indicates that retail ad counts at national retailers including Best Buy and the OSS chains have increased year-over-year by a noteworthy 94% from 17 ads in May 2013 to 33 in May 2014.


The sharp increase in ad counts is mostly attributable to Brother doubling its ad investments to 22 ads and HP growing from zero ads in May 2013 to 5 ads in May 2014. With that, Brother strongly pushed its MFC-J4510DW and MFC-J4710DW, while HP worked to generate demand for its Officejet 7610 over the last twelve months.

While anecdotal evidence suggests that users rarely print A3 pages, some customers may still be inclined to purchase an A3 inkjet for those ‘just-in-case’ situations, especially if the model is on ad with an instant savings promotion.

In addition to a growing retail presence and increasing ad counts for A3 business inkjet AiOs, the segment has also seen a number of new product launches in 2014. The following chart shows year-to-date A3 business inkjet AiO launches:


So far this year, inkjet manufacturers have introduced 6 new products in the segment, with the most recent launch by Brother. Just last week, Brother launched three new A3 business inkjet AiOs that come equipped with new connectivity options including WiFi Direct and NFC, a technology that vendors continue to integrate in their new inkjets, as noted in my first blog.

Given that A3 business inkjet AiO manufacturers have increased their retail presence, grown their ad investments, and launched more of these devices than in years prior, vendors are likely to continue to seek growth in this segment.

Posted in gapIndustry, gapNews, look who's talking, mind the gap: blog | Tagged , , , , , , , , , | Leave a comment

Twice: Sears, Samsung Tops In July 4 Ads

New York — Sears and Samsung dominated the Independence Day period in appliance print ads, a study by TWICE market research partner Gap Intelligence showed.

According to Gap home appliance analyst Christine Boersing, Sears accounted for about 21 percent of all retail advertising activity for the holiday period of June 29 to July 11, with more than half of its ads touting its private-label Kenmore brand.

hhgregg was No. 2 in advertising aggressiveness surrounding July 4, with about 18 percent of all holiday circulars, followed by BrandsMart USA at 13 percent, The Home Depot at 12 percent, and Best Buy at 10 percent.

Remaining retailers tracked by gap each earned a single-digit percentage of ad share, including, in descending order, Pacific Sales and Lowe’s (6 percent); R.C. Willey  and P.C. Richard (4 percent); ABC Warehouse (3 percent); and Fry’s (2 percent).

On the vendor side, Samsung repeated its year-ago performance to secure the top position, with a heavy ad emphasis on laundry and refrigeration, while LG was the second-most advertised majap brand with a similar product emphasis.

Indeed, laundry was the most promoted category during the holiday period with more than one-third of all majap ads (34 percent), followed by refrigerators at 27 percent, ranges at 15 percent, dishwashers at 13 percent, and over-the-range microwave ovens at 6 percent.

Advertising grew in the weeks leading up to Independence Day, and peaked in the days immediately preceding it, Boersing said, repeating the pattern from 2013’s Memorial Day and July 4. Gap collected over 1,100 ads from seven major markets across the country for its Independence Day analysis.

Posted in gapIndustry, gapNews, mind the gap: blog | Leave a comment

Twice: Overall TV Shelf Placements Dip


Posted in gapIndustry, gapNews, mind the gap: blog | Leave a comment

gappy Tumblr 4: The Dreaded Full-Calc

One of the biggest time-sucks out of any gapper’s day is the dreaded full-calc of a large file. Depending on the file it can take anywhere from 2 minutes to an hour, and during that time a gapper is left wondering what to do while they wait – and pray – for the calc-ing to finish. At the end of last quarter, I was fortunate enough to get one of these long calc-ing files, and had to spend some time keeping myself from losing it at my desk. Below is my go-to guide to keep gappers occupied during the many stages of a full-calc:

Start by spending quality time with the high schooler’s in the courtyard

Lip-sync your favorite songs at your desk

Gracefully beat a coworker at ping pong

Take a bath

Still not done calc-ing?

How about…you grab some food from the kitchen?

Or learn a new trick

Become invested in sports

Get to know a new coworker…

…and then engage them in a staring contest

The file still hasn’t finished? Don’t panic!

If you’re getting antsy, try rolling around

Help someone with their groceries

Use a common item around you to distract you

Show off your dance moves

Find a hill to sled down

Only when you’ve reached your breaking point, resort to the following:

Space out at your desk

Think of something you’d rather be doing

Wallow in self-pity

Attempt an escape out of the office

Whatever you do, don’t come up with a brilliant plan to destroy your computer

Wait, it finished calc-ing?

Take this moment to realize that your future suddenly looks a lot better.

Posted in gapRaps, look who's talking | Leave a comment

Introducing the Weekend Warrior!

To kick-off the summer season ahead, we here at gap intelligence are unveiling a brand-new component to our blog series…the Weekend Warrior! As a company and as collective individuals, we each strive to contribute to something bigger and better than ourselves day in and day out. Within our office walls and out into the world, our passions, talents, and interests run far and wide.

Here’s what our gappers have been up to the last couple of weeks…

Kim Plavan – Data Specialist

gapper Kim and her son Bo recently set out on a muddy Saturday morning adventure and headed to Camp Pendleton to participate in the Marine Corp’s World Famous Mud Run! The Mud Run helps raise funds for Marines and their families to enjoy various athletic clubs and activities on base.


Kim Before


Once Kim and Bo arrived at Camp Pendleton, they joined up with several soccer families from Bo’s team. The Mom’s ran (walked) the 5k course, while the kids ran the 1k. Both courses sported several obstacles including walls to climb, tunnels to crawl through, muddy hills to conquer, and nets to climb up, over, and under. Oh…and there were many many mud pits. The last mud pit before the finish line was a doozy! The mud was so thick it felt like cement. Luckily when some of the kids got stuck, the Marines hopped in the pits to pull them to freedom. gapper Kim and her entire team had a great time and can’t wait to get dirty again next year!






Scott Peterson – Industry Analyst 


A couple of weekends ago we celebrated the Fourth of July, but rather than celebrating in the sunshine like many other local San Diegans, Camera Analyst Scott Peterson was using his talent for spinning records as a wedding DJ! Two of Scott’s longtime friends got married at the scenic Tom Ham’s Lighthouse located on the beautiful San Diego harbor. DJ’ing was a great way for Scott to return a favor to the groom, who recently gave a gapU presentation about being a Union Tribune photojournalist. That said, Scott happily found himself talking cameras with many of the like-minded guests at the wedding…all the while pumping the jams that kept the crowd dancing into the early morning hours! With the venue located right along the waterfront, Scott had a turntable with an extraordinary view.

Pasha Skripin – Programmer

This month, gap intelligence is privileged to have two of our programmers visiting from Uzbekistan.  Aside from working on amazing code, Shavkat and Pasha are taking in many of the sights and sounds of San Diego. During our last monthly company meeting, Pasha Skripin expressed his desire to see some live local music while in town. Naturally, no other place would do except The Casbah! Fellow programmer, Shavkat Samatov, and Camera Analyst, Scott Peterson, accompanied Pasha to the infamous venue for a show by the Creepy Creeps and the ever-so entertaining Schitzophonics. After an ear-shattering bout of rock music and slam-dancing into oblivion, Pasha is already looking forward to his next dose of the San Diego music scene…especially the late-night burritos that go along with it!


Check back often to keep up on what the gappers are up to and feel free to share your own Weekend Warrior activities with us as well!

We are driven to contribute to something bigger than ourselves and trust that our hard work will turn into something great and that we’ll have fun along the way!

Posted in gapPeople, gapRaps, look who's talking, mind the gap: blog | Leave a comment

Go North Herbie!

Nothing says summer like a trip to Alaska. While many were basking in the California sunshine, Herbie headed north to Canada this summer where he was met with clouds, rain and cold weather.  From Vancouver, Herbie then embarked on an Alaskan adventure for a week and returned to Vancouver for a few more days of sightseeing. Come travel along to see the sites of the Pacific Northwest and beyond with Herbie as we head north!

Day 1: Vancouver, B.C.


Herbie in front of the 2010 Olympic Torch at Jack Poole Plaza.


Herbie grabbing lunch at the Cactus Club Cafe.

Day 2:  Sightseeing in Vancouver before setting sail for Alaska


Visiting Gastown’s Steam Clock.

Day 3: Sailing in the Inside Passage


It’s cloudy and cold out here.

Day 4: Juneau, AK


Herbie at Mendenhall Glacier.


Herbie is excited to ride the Mt. Roberts Tramway.

Day 5: Skagway, AK


Herbie was met with beautiful weather and a gorgeous backdrop in Skagway, AK.


Herbie taking a train ride up the Yukon Pass.

Day 6: Glacier Bay National Park


Herbie digs glaciers.


What else did you expect to see in Glacier Bay National Park?

Day 7: Ketchikan, AK


A little rain can’t damper sightseeing for Herbie.

Day 8: Sailing back to Vancouver

Herbie is going to miss this view.

Day 9: Back in Vancouver, B.C.


Enjoying the miniature train ride in Stanley Park.

Day 10: Capilano Suspension Bridge and Grouse Mountain


Herbie at the Capilano Suspension Bridge in the pouring rain.


Herbie enjoying the scenery on the cliff walk.


Herbie on Grouse Mountain ready to head to the top of the Eye of the Wind.


The view disappearing in the viewing pod in the Eye of Wind.

Herbie had a wonderful time traveling this summer. Thanks for following Herbie on another adventure. Until next time…

Posted in look who's talking, mind the gap: blog, Uncategorized | Tagged , | Leave a comment

gap intelligence named emerging business of the year by the San Diego Chamber of Commerce

-Market research firm recognized for revenue growth, culture and staying power -

SAN DIEGO – June 24, 2014 – gap intelligence, a values-led market research firm, announced today it was named “Outstanding Emerging Business” at the recent San Diego Chamber of Commerce 2014 Small Business Awards.


The firm was specifically recognized for its history as an established San Diego County-based business with significant revenue growth, unique culture and staying power.

“What makes gap intelligence unique is that we’re a values-led market research firm
founded on the idea that business has a responsibility to the people and city that make its existence possible,” said gap intelligence Founder and President Gary Peterson. “That’s why the validation of being honored by our local Chamber is a profound honor.”

gap intelligence recently went through a metamorphosis from a firm focused on what and how to do business to why it’s in business. Finding its “why” led to several culture-first initiatives such an in-house institute of higher education called “gapU” that
translates to increases in retention, productivity, and scalability within the company.

Another company culture standout is its “3T’s” philanthropic committee dedicated to
giving time, talent, and treasure to San Diegans in need. This group organizes monthly and quarterly charity events including serving meals at the San Diego Food Bank, beach cleanups, a blood drive and an annual golf tournament that raised $32,000 to benefit the Emilio Nares Foundation. ENF is a local nonprofit dedicated to helping
navigate families through their child’s journey with cancer.

The firm also experienced a major overhaul this year by bringing data collection and software development entirely in-house. These tools help position the company as a leader in the very complex and constantly changing IT, consumer electronics, imaging and home appliance industries.

The Chamber is the largest nonprofit advocate for the San Diego regional business community. It is the most influential business network and resource for growing commerce in the San Diego region with nearly 3,000 members representing 400,000 employees.

About gap intelligence
San Diego-based gap intelligence is a values-led corporation that works with
manufacturers, resellers and industry players within the information technology,
consumer electronics, imaging, and home appliance industries to bring them up to the minute market intelligence. For more information: www.gapintelligence.com

For Immediate Release
Contact: Elizabeth Ireland
Stalwart Communications
(858) 922-9983


Posted in gapEvents, gapNews, mind the gap: blog | Leave a comment

Catching Up with the Aftermarket at the RT Imaging Summit

At the end of May, I had the pleasure of attending the RT Imaging Summit, hosted by Recycling Times Media (RT). The event was designed to discuss questions and issues faced by the North American remanufacturing market, and (hopefully) provide attendees with solutions. Around 100 people attended the event, a pretty respectable turnout for the first event held in North America, for North America (RT is also the host of the RemaxAsia Expo held in China each year). The exhibition room featured table exhibits for the gold and silver sponsors, including MSE, Mito Color, and Green Project, where you could visit with these companies during lunch or the mid-morning and afternoon breaks. While the majority of the attendees came from the remanufacturing side of the industry, there was also participation from OEM representatives who tried to provide a different perspective.

rt promo 2

The content of the show was extremely informative, with presenters ranging from remanufacturers and patent attorneys to chemical producers and printer remanufacturers. Because my view of the remanufacturing world is very specific, it was refreshing to be among people that are living in it every day and have a more robust understanding. Attending provided me with valuable insights and a new perspective that I might not have otherwise had.


The show started with a discussion about how the aftermarket has changed over the past 5 years or so. Since 2009 and the global financial crisis, there has been an increase in low cost foreign aftermarket products, clones, counterfeits, a decline in quality, and an increase in ecommerce. OEMs have been responding by stepping up patent infringement litigation, introducing new and more complicated chip technology and more complex cartridges, as well as increased printer refresh cycles — all of which provide limitations to the aftermarket’s market share. In particular, with the rise in ecommerce as a preferred shopping method, remanufacturers are increasingly finding themselves and their dealers or resellers competing with other resellers that, for whatever reason, can afford to offer competing products for a much lower price point.

However, while low-price online resellers are an issue and cut into the sales of legitimate remanufacturers and their partners, one of the things that I really respect about many of the companies was their acknowledgement that a main issue holding back the remanufacturing industry is quality, not price competition. Many participants agreed that they are currently very limited by quality, especially with regard to color, because color customers have different requirements and standards, whereas most people using monochrome for everyday office documents don’t necessarily need the highest quality output. Remanufacturers typically don’t have the resources to support a research and production facility that would be comparable to an OEM, and I respected that these companies were so upfront about the fact that they haven’t been able to achieve 100% OEM quality, and that no aftermarket company should say they have.


The timing of the conference could not have been better, as it happened to take place shortly after Canon filed an intellectual property complaint with the U.S. District Court for the Southern District of New York against 18 aftermarket manufacturers, distributors, and resellers in January and took many of the same complaints to the ITC against 33 companies (including some of the same 18) in early May. Litigation pretty much set the tone for the first day of the summit, as we heard from Print-Rite, a large remanufacturer that was also named in the recent Canon lawsuits, and got a lesson in the art of reading patent claims by patent attorney Ed O’Connor. After all of the presentations, open forums, and lunchtime discussions, my insight and understanding of patent infringement lawsuits in general increased significantly, as well as the kind of reaction they generate and impacts they have on the aftermarket from the remanufacturers themselves. There was a lot of back and forth about whether OEMs are bringing these types of lawsuits to shut down the aftermarket or defend their intellectual property. However, regardless of whether these defendants are actually infringing, simply bringing a lawsuit against a remanufacturer causes customers to question their legitimacy and can have lasting impacts on that company.

Because there hasn’t ever been an easy and affordable way for the aftermarket to keep up with OEM patents, it’s been difficult for remanufacturers to even know when they are infringing – an OEM could be filing for a new patent during a remanufacturer’s development of a new cartridge. As a result, Recycling Times developed its own solution to that challenge, announced at the show as the forthcoming Patent Smart (or PatentSmart) portal. This was a solution that I was not aware of before the summit, but it is definitely something worth keeping an eye on. Little information is available, but as far as I know, it will be a subscription-based portal that will allow remanufacturers to stay up-to-date on patented OEM products and components.


In the end, it was determined that there was at least one thing that was mutually agreed on by both remanufacturers and the OEM representatives: the two industries should be spending more time working together to focus their efforts on targeting those that undermine their legitimacy, such as counterfeits and clones.

From follow-up correspondence, it was clear that the show was a success and that attendees came away with new ideas and inspiration about how to address commonly-faced issues in their industry. While there may have been undertones of fear and concern over the detriments caused by OEM lawsuits, there was also a lot of talk about opportunity. The market is mature, the technological solutions are here, and customers are still looking for value. Although the future of the remanufacturing industry is unknown, it is clear that it’s changing fast and that the aftermarket needs to continue to adapt accordingly to successfully capitalize on these opportunities.

Posted in gapIndustry, look who's talking, mind the gap: blog, Uncategorized | Leave a comment