June 21, 2007
Inkjet Expert Andy Lippman Discusses Memjet and the Coming Inkjet Printer Revolution
By Databazaar Blog
Printer Pundits: Andy Lippman on Whether Inkjet Will Overtake Laser, Memjet's Intel-Like Ambitions, Inkjet Cartridge Environmental and Legal Issues, and More
Based on his extensive credentials, no one can deny that Andy Lippman has his finger on the pulse of the printer industry. He has worked at Lyra Research since 2004 as an Industry Analyst specializing in Ink Jet Supplies. His primary duties include tracking OEM and aftermarket strategies, conducting primary research, performing market sizing and forecasting, and attending industry events.
Speaking of trade shows, you can catch Andy on August 21, 2007 at Lyra's World Expo Preshow Conference, Supplies-Side Economics: What Inexpensive OEM Cartridges Mean to You. In the morning, Andy will present The Jet Set: Inside the Changing Ink Jet Market, and then participate on two panels in the afternoon. We thank Andy for bringing his expertise to Databazaar Blog during Printer Pundit Week. His interview below constitutes the fourth installment in our new Printer Pundits feature.
Databazaar Blog: Will inkjet printers someday replace laser printers in the office?
Andy Lippman: Yes, you will gradually see more and more inkjet based devices in offices. In fact, we currently estimate that about 25% to 35% of all desktop inkjet devices are installed in a business environment, whether it be a home office, small office, or workgroup unit.
But, I would not say that inkjets will replace laser printers. At this point, there are some strong advantages and disadvantages for both technologies. Laser print quality is widely accepted as a standard for text and graphic output (often called the "laser bias"). There are other trade-offs between laser and inkjet systems in terms of print speed, cost of operation, maintenance, text and graphics print quality, photo print quality, reliability, power consumption, color flexibility, hardware manufacturing, and consumables manufacturing.
HP's new enterprise inkjet MFP (CM8060/8050) is a significant first for many reasons, but it will take time for customers to get used to the idea of inkjet. Other OEMs are working to improve alternative inkjet technologies. Examples include the Xerox solid-ink Phaser and the Ricoh Gelsprinter. There's no doubt we'll continue to see innovations on both the inkjet and laser side.
Andy Lippman: Memjet has the potential to reshape the printing industry on a number of different fronts. First, Memjet's page-wide array technology is a glimpse at the future of printing. The demonstrated price/performance ratio of the Memjet print head is off today's charts. The technology rivals, if not surpasses, anything that Canon or HP (inkjet R&D leaders) may have in their inkjet R&D labs.
Print speed is one thing, but the company's business model may be the biggest force. Memjet plans to license its patented print head, cartridge, ink, controller chip, and other technologies to a range of companies. The company aspires to be the Intel or Texas Instruments of the printing industry. For the home and office market, licensees could include Apple, Dell, Xerox, Ricoh, Sony, Panasonic, Sharp, Toshiba, and the list goes on.
Ultimately, it is cutting the price of ink that would make the largest impact on industry profitability. Memjet plans to throw out the razor and blades model and make money on both the printer and the ink supplies. The company believes that its licensees could sell ink for 5 to 10 times less than current OEM prices. A home printer could yield monochrome pages for just 1 cent each and a color pages about 3 cents. For office devices, cost per page figures would be even lower. Memjet also wants to encourage refilling by authorizing a network of third-party dealers.
Databazaar Blog: Which recent inkjet innovation are you most excited about? Is there anything in pipeline that you think will shake things up even more?
Andy Lippman: Memjet is definitely the one of the most exciting innovations to come around in a long time. It's only once (maybe twice) in an industry's lifetime that you see a secretive, no-name company unveil a groundbreaking technology and business model. Memjet is not without its detractors. Major players are rightly skeptical of whether Memjet can move its products out of the lab and into retail.It is possible that a major player could come out with a similar page-wide technology. With Canon's substantial R&D investment, we're likely to see an advancement from them.
Other industry rumblings include a possible "general exclusion order" for imported Epson compatible cartridges. This court ruling (handed down by the International Trade Commission) would mandate that no third-party Epson cartridge can be imported into the United States until it is proved that it does not infringe on any patents. A huge blow for the aftermarket, this would make the cost of importing non-OEM Epson cartridges prohibitively expensive and practically end the trade in the U.S.
Other developments include HP, Epson, and perhaps other manufacturers lowering ink costs in emerging markets. This is a expanding strategy for encouraging printing in nations that have a low per capita income.
Databazaar Blog: What are the three biggest changes you've seen in the industry since you started with Lyra?
Andy Lippman: From an inkjet perspective: 1. The growth of remanufactured cartridges, compatible cartridges, and ink refilling around the world. The aftermarket has thrived for the last couple of years and OEMs now see them as a serious threat. Printer manufacturers have responded with counter marketing, patent litigation, cartridge encryption, soft money, and recycling programs. We're beginning to see an open discussion on the cost of home printing and lower OEM ink prices in some cases.
2. The emergence of page-wide inkjet arrays. Long talked about, we are beginning to see larger and larger printheads which offer giant leaps in inkjet print speeds. Inkjet now has the potential to enter high-volume markets including office, retail, and commercial sectors.
3. Advancement of ink technology. Traditional dye-based inks continue to improve in terms of durability, color gamut, and efficiency. Pigment-based inks have come a long way for photo and office use. There are hundreds of other ink variations for office, commercial, and industrial applications. Inkjet inks that print at 100 ppm and materials like glass, metal, fabric, wood, and other media.
Databazaar Blog: European manufacturers are facing stiff environmental regulations. What effect do you think this will have on American manufacturers? Do you expect environmental concerns to hinder the industry in general?
Andy Lippman: You're right in general the EU has taken a lead in environmental policies as it relates to electronics power consumption and waste. In April 2007 the Energy Star 2 certification went into effect. While this is not a regulation, it is interesting to see that most inkjet printers do not pass the strict standards. In May, HP released a limited-edition printer, the Deskjet F4100, that qualifies for the new Energy Star label. In the wide-format inkjet market, some industrial-strength inks have been outlawed in Europe as well as in parts of the U.S. because of their emissions.
The printer market is of course global, so any regulations enacted in Europe affect American companies or ones that operate in the U.S.. This means that companies will have to build printers to be more efficient in terms of power consumption, packaging, and ink use. We'll continue to see cartridge-recycling options, which are already available from all major manufacturers. It's possible that manufacturers will be required to have a yield of at least 1,000 pages per ink cartridge. This might reduce plastic waste from cartridge containers.
As with any challenge, there is opportunity. Inkjet technology can be used in new markets replacing less energy efficient processes. New areas for inkjet growth include industrial applications like textiles, packaging, and the fabrication of circuitry.
There is of course the environmental damage caused by paper consumption. As page volumes continue to grow (more so outside of the home), paper-related regulations are on the mind of every printer executive. Any major restriction to the use of paper could curb growth in the industry. However, it's unlikely that this will happen all at once (or anytime soon). It's more likely that governments will continue to take small steps to slow down the depletion of forests and pollution resulting from paper manufacturing. Environmental policies will be broad and will not target the hard copy industry specifically.
Databazaar Blog: You point out that HP's cartridge overhaul focuses on large-scale business consumers on price-per-page instead of price per cartridge. If such a small percentage of users print such a large percentage of the pages, is it possible companies like HP and Lexmark will eventually just let the consumer market go to focus on the business market?
Andy Lippman: The consumer printing market will always be important. The desktop ink cartridge industry is valued at $30 billion alone. There is still potential for growth in home photo printing, even though it has been somewhat over hyped. Small and home office printing (SOHO) represents another opportunity for both inkjet and laser desktop vendors. Inkjet printers are moving into laser territory with more robust duty cycles, better print speeds, and greater functionality. While laser printers are moving into inkjet territory with lower acquisition prices and smaller footprints.
The price-per-page message is not only related to business use. First, it's a response to aftermarket cartridge pricing, which does not give consumers detailed information on page yield and cost per page. It's also a result of the new ISO page yield standard passed in December 2006. Finally, cost of operation has gained new attention with the launch of Kodak's printers.
Databazaar Blog: Which printer(s) do you use at home and at work?
Andy Lippman: At home I have a low-end all-in-one from HP, the PSC 1510. It has lower-priced cartridges and a relatively high price-per-page. I fit into HP's category of an infrequent user. This is because I do much of my printing in the office on a HP LaserJet 4250.
About Printer Pundits
We spend most of our time here at Databazaar Blog on printer gear, but this impressive technology doesn't just appear by magic. With Printer Pundits, we bring you interviews with some of the luminaries in the printer industry — senior executives, analysts, journalists, inventors, and others. Of course, in today's world everyone is a pundit so please share your insights below.