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The Future of Thermal Printing - 2014-19

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The Future of Thermal Printing - 2014-19

  1. 1. The Future of Thermal Printing - “A View from the Shark Tank” Presented By Endre D. Vargha GMR Management Consulting 25th Annual Thermal Printing Conference, November 17 – 19, 2014
  2. 2. The Sharks Kevin O’Leary Mark Cuban Daymond John Robert Herjavec Barbara Corcoran The Offer: “30% Equity for $32.8 billion” GMR Management Consulting ‐ 2 www.gmrmanagementconsulting.com
  3. 3. Presentation Outline • Market Overview • Key Players • Recent Developments • Market Drivers • Technology Trends • Threats and Opportunities • What’s Next? GMR Management Consulting ‐ 3 www.gmrmanagementconsulting.com
  4. 4. Market Overview – Historical Perspective Military and Scientific Applications TI Develops TPH IC Calculator Display Key Milestones DT Fax DT/TT Barcode Printers TT Color TT Fax Card Printer POS /Kiosk Printers TT Imprint Mobile Printing D2T2 Photo Printers RFID Smart Labels Incremental Improve‐ments 1960s 1970s 1980s 1990s 2000s 2010s GMR Management Consulting ‐ 4 www.gmrmanagementconsulting.com
  5. 5. Market Overview • Three Different Printing Methods – Same Fundamental Technology • Direct Thermal (DT) • Thermal (Mass) Transfer (TT) • Dye Diffusion Thermal Transfer (D2T2) • Market Components • Printers (incl. service) • Supplies DT/TT/D2T2 GMR Management Consulting ‐ 5 www.gmrmanagementconsulting.com
  6. 6. Market Size – End User Prices 2014 Worldwide Sales $32.8 B 24% 33% 31% 12% Printers DT Supplies TT Supplies D2T2 Supplies 2019 Worldwide Sales $40.9 B 23% 35% 31% 11% Printers DT Supplies TT Supplies D2T2 Supplies Source: Smithers Pira GMR Management Consulting ‐ 6 www.gmrmanagementconsulting.com
  7. 7. Market Size – Manufacturer’s Prices 2014 Worldwide Sales $12.5 B 44% 22% 27% 7% Printers DT Supplies TT Supplies D2T2 Supplies 2019 Worldwide Sales $15.9 B 42% 21% 30% 7% Printers DT Supplies TT Supplies D2T2 Supplies GMR Management Consulting ‐ www.gmrmanagementconsulting.com 7 Source: Smithers Pira
  8. 8. Key Players • Printer OEMs • Zebra Technologies (USA) • Sato Holdings Group (Japan) • Seiko Epson Corporation (Japan) • DT Media Manufacturers • Oji Paper Company (Japan) • Hansol (Korea) • Kohler (Germany) • Appvion (USA) • Mitsubishi (Japan) • Ricoh (Japan) • TT Media Manufacturers • ARMOR Group (France) • Dai Nippon Printing (Japan) • IIMAK (USA) • ITW (USA) • Ricoh (Japan) • D2T2 Media Manufacturers • Dai Nippon Printing (Japan) • Kodak Pension Plan (UK) GMR Management Consulting ‐ 8 www.gmrmanagementconsulting.com
  9. 9. Recent Developments • Industry Consolidation & Divestitures Continues • Zebra Technologies acquires Motorola Solution Enterprise Business • Bemis sells MACtec to Platinum Equity • Honeywell completes the purchase of Intermec, Inc. • Datamax‐O’Neil acquires Source Technology’s barcode printers • Printronix is sold to Corona Investment Partners • Sato acquires Argox GMR Management Consulting ‐ 9 www.gmrmanagementconsulting.com
  10. 10. Market Drivers • Global Economy Growth 2014‐ 19 GDP Projections 3.3 – 3.8% • ASIA 6.5 – 6.8% • N. America 2.3 – 3.1% • L. America 1.3 – 3.0% • W. Europe 0.8 – 1.9% • E. Europe 2.7 – 3.9% • ROW 2.7 – 3.9% Source: IMF GMR Management Consulting ‐ 10 www.gmrmanagementconsulting.com
  11. 11. Market Drivers • Productivity Improvement (ROI) • Customer Service • Wireless Communication • RFID • Security Concerns • Product Safety & Anti‐Counterfeiting • Innovation, media & applications • Government Regulations (sometimes) GMR Management Consulting ‐ 11 www.gmrmanagementconsulting.com
  12. 12. Technology Trends • Internet of Things (IoT) • Near Field Communications (NFC) • Cloud Computing, Big Data • Wearable Devices • Low Power Sensors • Mobile Applications • Smart Machines • Printed Electronics GMR Management Consulting ‐ 12 www.gmrmanagementconsulting.com
  13. 13. Internet of Things • IoT is the third wave of IT‐driven competition using smart, connected products  First wave: the automation of individual activities  Second wave: the rise of the internet with inexpensive and ubiquitous connectivity  Third wave: the dramatic improvements in product functionality and performance GMR Management Consulting ‐ 13 www.gmrmanagementconsulting.com
  14. 14. What Are Smart Connected Products? • Three core elements:  Physical components, mechanical and electrical parts  Smart components, sensors, microprocessors, data storage, software, and embedded operating systems  Connectivity components, ports, antennae, and communication protocols • One‐to‐One • One‐to‐Many GMR Management Consulting ‐ 14 www.gmrmanagementconsulting.com
  15. 15. The IoT Technology Stack PRODUCT CLOUD Smart Product Application Rules / Analytics Engine Application Platform Product Data Database CONNECTIVITY Network Communications PRODUCT Product Software Product Hardware Identity & Security External Information Sources Integration with Business Systems GMR Management Consulting ‐ 15 www.gmrmanagementconsulting.com
  16. 16. What Can Smart Connected Products Do? Autonomy Optimization Control Monitoring Sensors and external data sources enable the comprehensive monitoring of: • Product’s condition • External environment • Product’s operations & usage Monitoring also enables alerts and notification of changes Software embedded in the product or in the product cloud enables: • Control of product functions • Personalization of the user experience Monitoring and control capabilities enable algorithms that optimize product operations and use in order to: • Enhance product performance • Allow predictive diagnostics, service and repair Combining monitoring, control and optimization allows: • Autonomous product operation • Self-coordination of operations with other products and systems • Autonomous product enhancement and personalization • Self-diagnosis and service GMR Management Consulting ‐ 16 www.gmrmanagementconsulting.com
  17. 17. Explosion of Connected Devices Source: BI Intelligence Data from Gartner Research GMR Management Consulting ‐ 17 www.gmrmanagementconsulting.com
  18. 18. Zebra Technologies ‐ ZATAR • ZATAR is a cloud based infrastructure that enables users to connect devices to the internet. Launched in Oct. 2013 • ZATAR is an open software platform for development of IoT • ZATAR’s main components are: • ZATAR Gateway • ZATAR API • ZATAR Web App GMR Management Consulting ‐ 18 www.gmrmanagementconsulting.com
  19. 19. Implication for Printer OEMs • Need to rethink their business models, identifying new opportunities for creating and capturing value. • Examples: • GE invested in its “industrial internet” linking tasks and equipment creating more than $1.5 billion incremental revenue • Google Nest thermostat creates value by digitizing the entire home‐temperature‐ control process. • Sonos wireless music systems place the user interface in the cloud enabling users to control the portable speakers from a smartphone. • Philips Lighting users can control lighting hue light bulbs via smartphones. • Tesla vehicles in need of repairs can autonomously call for corrective software download or send notification to the customer for valet to pick up the car. GMR Management Consulting ‐ 19 www.gmrmanagementconsulting.com
  20. 20. Near Field Communication (NFC) • NFC is an offshoot of RFID designed for devices within close proximity less than 8.0” (0.2 m) • Initially standard was established in 2004 by mobile phone makers. • First NFC phone introduced in 2006 by Nokia • Two communications modes active and passive GMR Management Consulting ‐ 20 www.gmrmanagementconsulting.com
  21. 21. Uses of NFC Technology GMR Management Consulting ‐ 21 www.gmrmanagementconsulting.com
  22. 22. NFC Changes the Credit Card System • Status quo – The magnetic stripe cards virtually unchanged since 1970s in USA • “Chip‐and‐PIN” EMV smart cards introduced in Europe in 2004 reduced fraud by 80% • Massive security breach and credit card fraud resulted in the US banks moving to EMV payment system by October 2015. • EMV has better security, but 100% secure • Most new retail card terminals will have NFC option built in – enters Apple Pay Smart Card POS Terminal GMR Management Consulting ‐ 22 www.gmrmanagementconsulting.com
  23. 23. NFC Changes the Credit Card System • Smart Card Fraud GMR Management Consulting ‐ 23 www.gmrmanagementconsulting.com
  24. 24. NFC Changes the Credit Card System • Apple Pay using NFC is secure and fraud resistant • Needs fingerprint on iPhone to make a purchase • Apple most likely will introduce the “AppleCard” to compete with Visa, MC, Discover and AMEX with 2% discount on every purchase • Merchants will promote ApplePay to customers who save money and the iPhone may actually pay for itself GMR Management Consulting ‐ 24 www.gmrmanagementconsulting.com
  25. 25. NFC Applications are Expanding • Lost bags cost airlines $2.58 billion annually • IATA InBag program includes permanent tags using NFC enabled phone and app allowing the traveler program the tag • Includes LCD display has 1D barcode and passive NFC chip with multiple technologies • British Air rollout planned for late 2014 Permanent Bag Tag GMR Management Consulting ‐ 25 www.gmrmanagementconsulting.com
  26. 26. Threats and Opportunities GMR Management Consulting ‐ 26 www.gmrmanagementconsulting.com
  27. 27. Threats ‐ DT • Direct Thermal • Internet eReceipts (POS/Kiosk) • Long‐term image stability (outdoor use) • Lack of acceptable color (inkjet) • NFC (bag tags, shelf labels) GMR Management Consulting ‐ 27 www.gmrmanagementconsulting.com
  28. 28. Threats ‐ TT • Thermal Transfer • Ecology concerns (solid waste) • Data security (latent image) • Competing technologies (laser) • Direct thermal GMR Management Consulting ‐ 28 www.gmrmanagementconsulting.com
  29. 29. Threats – D2T2 • Dye Transfer • Smart phones (social media) • Competing technologies (inkjet, laser) • Ecological concerns (5x image size) • Speed, cost (1 hr photo finshing) • User’s experience (Kodak’s exit) GMR Management Consulting ‐ 29 www.gmrmanagementconsulting.com
  30. 30. Threats ‐ Common • Market saturation – printers (commodity prices) • Industry consolidation – capital allocation • Lack of “breakthrough” innovation (ZINK) • Overcapacity in DT & TT supplies manufacturing “Long product lifecycles, market saturation, and high penetration rates paint a gloomy future for AutoID hardware vendors that disregard the need to revise their go‐to‐market strategies. “ VDC Research GMR Management Consulting ‐ 30 www.gmrmanagementconsulting.com
  31. 31. Opportunities ‐ DT • Direct Thermal • Mobile applications • Linerless media • Multi‐color • Value added alternative to competing technologies GMR Management Consulting ‐ 31 www.gmrmanagementconsulting.com
  32. 32. Opportunities ‐ TT • Thermal Transfer • Harsh environment applications • Security printing • Mobile printers • Packaging automation (integration) GMR Management Consulting ‐ 32 www.gmrmanagementconsulting.com
  33. 33. Opportunities – D2T2 • Dye Transfer • Photo I.D. card printing • Decorative products • Event photography • Museum quality photos GMR Management Consulting ‐ 33 www.gmrmanagementconsulting.com
  34. 34. Opportunities ‐ Common • IoT – Industrial printers • Underserved markets (Asia & Africa) • New applications & innovation (anti‐counterfeiting, security) • Managed Print Services (cloud printing) GMR Management Consulting ‐ 34 www.gmrmanagementconsulting.com
  35. 35. What’s Next? • Increased price competition among existing players and new entries to gain market share • IoT will give a short term boost to the barcode printer market • NFC will be a disruptive technology to POS receipt printing market • New profit pools will be in niche application, such as security printing, printed electronics, harsh environment applications • Competitive technologies mainly inkjet and laser will advance their penetration industrial applications requiring color • Industry consolidation & divestitures will continue GMR Management Consulting ‐ 35 www.gmrmanagementconsulting.com
  36. 36. Thank You GMR Management Consulting ‐ 36 www.gmrmanagementconsulting.com

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