Functional equivalents

Walk around most midsize to large enterprises and you'll likely see what I see: networked copiers and printers hooked up to scanners and faxes, mixed with all-in-one devices that make the same functions accessible from a desktop PC in a single package.The chief reason is convenience. Users enjoy having multifunction tools at their desk or close to it.Combine the convenience of multifunction printers with falling prices'and throw in the likelihood of cheaper consumables on the horizon'and you see a trend emerging.'The MFP market is definitely rapidly growing,' said John Lamb, a senior marketing manager at Canon U.S.A.'s research and development center in Irvine, Calif.Functionality seems to be the main appeal to enterprises, while price is drawing in small offices and individual users.'When the enterprise person is buying, they're shopping more with the solution in mind. They're not aisle-walking, they have [specific] products in mind,' Lamb says.Beyond office settings, he said, many consumers who like the extra functionality but saw MFPs as out of reach have been buying more of them as prices come down.Brooks Gray, a senior analyst with Technology Business Research in Hampton, N.H., added, 'The new technologies associated with the all-in-ones and the lower price points are driving adoptions throughout small businesses and enterprise workgroup environments.'Even spatial factors might increase the popularity of MFPs: Smaller office spaces'even for executives'mean less room for multiple devices; an MFP saves desktop real estate and ups convenience.This is especially true of the new color models featuring readers for most memory card options. Where working with photos is important, these devices can speed photos into a computer system or into print.[IMGCAP(2)]They often feature a proof-sheet option that will produce a sheet of thumbnail images , allowing users to select and print photos without even using a computer to manage the process.Document scanning in small- or midsize volumes is another improvement found on many MFPs, particularly on laser models, where automated document feeders predominate. Many lasers, while printing solely in black and white, offer color scanning and even faxing.Networking capabilities are another convenience. While small MFPs aren't designed as enterprise workhorses, having access to a given printer from time to time has its advantages.'I think it's going to start to grow a little bit more,' Lamb said of networking capabilities. 'There are very few MFPs today that support networking,' but that will likely change soon.Vendors also are looking to ensure networking security. Canon's imageRunner software for multifunction devices recently received Common Criteria Evaluation Assurance Level 3, the highest ranking available for such devices. Canon said the software also conforms to the National Security Agency's guidelines for managing classified documents and keeping sensitive information secure.It's easier to replace a broken $129 unit than have it repaired, but enterprises don't always have that luxury with higher-priced machines. Costs for service contracts are due to go down, as will prices for consumables such as ink and toner, according to Gray of Technology Business Research.'Both warranty pricing and consumables pricing will be the next target for price declines. The warranty on the printer itself is of course a hot area for pricing models,' he said.Such price drops will be welcome news to users, particularly in the area of consumables. The cost of cartridges can, in the course of a year, equal or surpass the cost of the device itself, depending on volume. Refill services'now setting up shop in strip malls and shopping centers'are gaining ground, but makers such as Hewlett-Packard say most users still buy new cartridges when old ones run out.'My expectation is that with the increased competition, particularly by the likes of Dell as they build out their printing and imaging group, ink prices will be driven down further into the sub-$30 range,' Gray said. 'A number of the vendors are struggling to turn a profit on the lower end of hardware and they're building most of their profitability around ink.'Issues such as service costs or the price of consumables haven't yet turned off users on the notion of an all-in-one device, however. For single users, small workgroups and remote offices'particularly where photo printing is necessary'the MFP can meet a number of needs.The next wave of innovation may come from Dell, which upended the traditional desktop computer market with its Internet-driven ways of monitoring and responding to consumer demands and tastes.Analyst Gray said he expects to see a variety of special discounts and incentives from Dell and other large companies. 'Free shipping one day, memory upgrades another day, an upgraded processor at a lower cost,' he said. These companies will 'create dynamic pricing around the consumables replacement or original sales, if the attach rates are high enough.'His bottom-line outlook: Users can expect 'increased functionality within smaller form factors, continued price declines across the hardware and, over the next few years, you should see additional price competitiveness across warranty services and consumables with the uptick in competition.'