Plain paper fax challenging copiers

Discount Store News, Jan 4, 1993

With computers, fax machines and printers flying off retail shelves as the home office continues to boom, personal copiers seem to be lagging behind. That might be because of the cost of the units (they start at $500 or so); HO users might have less use for multiple copies, particularly at the price, than they do for one hard copy from a printer, and, the product is probably lower down the heirarchy of demand than core products such as computers.

According to retailers, there are other reasons, as well. One major national CE dealer, who asked not to be identified, said that his company has dropped the category entirely. "There wasn't that much demand anyway," he said. And the fact that the copiers don't include a toner cartridge (at about $80) makes matters worse." Consumers, he said, are opting for plain paper fax, which now costs about the same as both a personal copier and a fax machine and performs both functions. "The toner cartridges cost a fraction of a personal copier cartridge, and you get two machines that take up the space of one," the retailer noted.

Canon, which virtually owns the personal copier market, has responded in two ways: producing a new, down-sized and -priced line of personal copiers, and introducing a new plain-paper fax machine that will sell out at well under $1,000. Kmart, which is introducing its first true home office department, is similarly hedging its bets, merchandising a Canon 310 Personal Copier, a Sharp plain paper fax and traditional fax machines. The result: The consumer can buy the plain paper fax for exactly the same price as a low-end fax and personal copier, and save on the desk space.

Marshall Paisner of BrandsMart USA noted that the personal copier category is becoming less profitable, partly as the price of plain paper fax declines and also because the quality is often not worth the investment to the consumer. "And, we sometimes see units we sell showing up elsewhere at less than we paid," he said.

He recommends keeping an eye on anti-curl standard fax machines, a category pioneered by Brother, soon to be joined by Panasonic and others. "The Brother machine, at about $399, is one of the best-kept secrets in the industry," Paisner said. "For someone with light copying needs, it's ideal and extremely cost-effective. And it has a cutter. For a significant number of home office users, a fax is really the answer to their copying needs; they just don't know it."

A step-up machine, the 650, is also selling well he said, because of expanded memory, he added. "In the future, we're going to have a box that does all of this at once," Paisner said. "I see something that acts as a fax, an answering machine, and so on, in a single desktop box. Apple's the only company close so far, but they haven't done much with it to date. I think well see devices like that pretty soon, though.

Others maintain, however, that the standalone personal copier market has hardly been scratched, and has considerable room for growth. A buyer for a large national office supply chain noted that "there are several tiers of copying needs: the emergency user, who doesn't really plan to do much copying at all; the heavy user, who should get a professional machine or use a copy service; and the general-level user. This last group really needs a personal copier."

He added that "the chains who have gone after the business are doing well with it, but for a lot of the consumer electronics retailers, the category is just an afterthought. Plain paper fax may eat up some of that market as its price comes down, but it is slow and inefficient and there's always going to be the home office user who is going to want professional-level performance at home. And personal copiers are a bargain, particularly the new generation."

Canon virtually owns the market, he said, because of the company's added features, like instant warm-up. But Xerox has made significant inroads due to its business reputation and extended warranty. Sharp, which is the third major player, is coming up, as well. Canon also appeals to users because of its reputation for requiring few repairs; virtually all parts that normally require service are included in its throwaway toner cartridge.

Canon has also addressed the major issue of the environmental impact of throwing away $80 worth of steel, plastic and toner with an international recycling program that collects the used cartridges and returns them by container to plants in Asia where they are disassembled, with almost all ingredients (including leftover toner) then recycled and used for new cartridges.