Saturday, December 31, 2005

Observations: Hard Copy Time Capsule

My Premier Column

The Hard Copy Observer, December 2005

by Jim Lyons

Jim Lyons is a veteran of the printing and imaging industry, with nearly 25 years of experience gained through various assignments at HP, including marketing, program-management, and business-development positions in the firm’s LaserJet business and the Imaging and Printing Group (IPG). Lyons’s long and extensive career provides him with a distinctive perspective on the hard copy industry, and I am delighted that he will be sharing his observations with Hard Copy Observer subscribers on a regular basis. Starting this month, Lyons will write a column exploring the state of the hard copy industry, including significant events of the past and trends to watch in the future. Lyons’s first column looks at some of the key industry headlines from 10 years ago and reflects on how the market has changed (or not) during the past decade.

On October 14, 2005, I found a printing industry time capsule of sorts from exactly 10 years ago. Cleaning up on the last day of my 25-year career at HP, I discovered three crisp Hard Copy Observers from October, November, and December of 1995 lying beneath a pile of other ephemera.

Had fate placed these at my door, guiding me to glean valuable insights into the history of our industry? Or is my find merely the random result of pack-rat behavior, and is it only coincidental that those back issues lined up precisely with the midpoint of the 1990s just as we’re wrapping up the first five years of the 2000s? Can this 10-year-old snapshot of the imaging and printing industry teach us about the industry today? What does it reveal about the industry’s future?

Is there something special about exactly 10 years ago, the mid-1990s, at least from the printing industry’s view? Absolutely! A look back on the general interest news of the day—OJ wins his case, Atlanta wins the World Series, Braveheart wins the Oscar—doesn’t reveal much beyond onetime aberrations or oddities (sorry, Braves fans). But the worlds of communications and publishing were at a major turning point. For the 20 or so years prior to 1995, there was a relatively slow but steady transition from office documents and newsletters produced using typewriters and manual paste-up methods to documents produced and duplicated using ever-improving personal computers, software, laser printers, and copiers. Over the past 10 years, we have seen a revolution in how people communicate as both consumers and producers of information and in their personal lives, businesses, and other institutions.

Ten years ago, widespread use of e-mail was still in the future, and the World Wide Web had yet to catch on with the masses. The adoption of electronic distribution of information was still a rather novel idea in the mid-1990s. By now, these changes have altered every aspect of the printing and imaging business.

The Internet boom, bust, and rebirth all were in the future in 1995, as were digital cameras, MFPs or all-in-ones, Yahoo, Amazon, Google, Napster, iTunes, MP3s, blogs, RSS feeds, podcasts, and so forth. In addition, pervasive electronic distribution of information spurred the natural selection process and contributed to irreversible shifts in sales channels, support methods, marketing communication vehicles, customer behavior and expectations, and “price floors.”

Don’t trust me? Let’s take a brief look at my “time capsule.”

“The language that attendees debated was HTML, not PostScript, and it was Web pages, not web presses, that drew the crowds.”

—“The Internet Is Hot, Hard Copy Is Not at Seybold San Francisco,” Hard Copy Observer, October 1995, page 12

After long feeling confident that printing was a central part of overall trends in the PC industry (due to years of focus on word processing, desktop publishing, GUIs, fonts, common imaging models, and so forth), many a printing industry executive experienced a sinking feeling in 1995. Clearly, the winds of change were blowing if Seybold, long synonymous with printing, adopted a focus on publishing—and Web publishing at that.

“Hewlett-Packard expanded into yet another market segment with the launch of the CopyJet … essentially a hybrid device that combines HP’s scanning and color ink jet technologies to create a new class of product.”

“HP Attacks Copier Market with CopyJet Color Copier/Printer,” Hard Copy Observer, October 1995, page 1

Multifunction desktop machines (remember the term Hydra?) had made their appearance earlier in the 1990s but were based on monochrome electrophotographic and ink jet printers, not color. With the introduction of the CopyJet, the industry’s first multifunction color ink jet, HP eliminated the old “chicken-and-egg” dilemma, which, at the time, was “Why does an office need a color copier when there aren’t color printers producing color originals?” Vyomesh Joshi, then general manager of HP’s Home Imaging Division, predicted, “There will be applications you can’t think of now.”

“Canon … rolled out the LBP-460, a new 600 dpi laser with an amazingly low street price of $369.”

—“Canon’s New $369 Laser Makes Life Tough for Rivals,” Hard Copy Observer, October 1995, page 1

“At a time when there is considerable skepticism about the prospects for color laser printers, Peerless Systems … has announced new technology that it believes will make a $2,500 contone color laser possible by 1997.”

—“New Peerless Technology Aims to Make $2,500 Color Laser a Reality by 1997,” Hard Copy Observer, October 1995, page 11

“Let’s see, I need a box of floppy disks, and a copy of Myst, and, oh, how about a six-thousand dollar Color LaserJet. With HP’s Color LaserJet now available through Computer City Direct … that scenario is possible, although perhaps ridiculous.”

—“HP Color LaserJet Shows Up in Computer City Catalog for $5,999,” Hard Copy Observer, December 1995, page 24

These are some stunning revelations and forecasts, regarding both price and channel. Sub-$500 monochrome lasers had been a reality for a few years, but $369 was a shocker. In addition, few would have believed the $2,500 color laser printer was just the start of rapidly dropping prices for this market segment, and HP’s venture with Computer City was hardly viewed as a harbinger of the mass movement to e-tail (and retail) that has transformed the distribution of printing and imaging products.

“The record crowds and endless hustle and bustle could not hide the fact that the printer industry is now at a crossroads.”

—“A Crowded COMDEX Reveals a Printer Industry in Transition,” Hard Copy Observer, December 1995, page 68

While the COMDEX article goes on to define the crossroads in terms of smaller players competing against dominating market leaders, the industry was in transition in other ways, as well. And, of course, COMDEX itself, still peaking in 1995, was not to remain healthy for many more years, until it was finally put out of its misery a couple of years ago. I would argue that the pervasiveness of new product information on the Internet has made obsolete—or at least less necessary—the need to gather as an industry to find out what is new. While there remains a very large Las Vegas gathering in January, try to find a printer or PC at CES. You can, but it is not easy.

(A COMDEX footnote: my October 1995 HCO still has its inserted invitation to the first annual HCO Briefing Breakfast, which had a good run before seeing the writing on the wall.)

“A CompactFlash card: SanDisk believes that these will soon be as common as floppy disks.”

—photo caption in “New Association Endorses SanDisk CompactFlash Memory,” Hard Copy Observer, November 1995, page 13

The article lists application areas as “digital cameras, pagers, personal digital assistants (PDAs), palmtop computers, cellular phones, voice recorders, data collection scanners, monitoring devices, set-top boxes, and any other product,” although it notes, “Thus far, there is only one product on the market that uses CompactFlash cartridges: IBM’s Palm Top PC110, a palmtop PC marketed in Japan.”

Although this article is less directly related to hard copy than most, it is among the more prescient articles in any of the three back issues, not only for its reporting of what must have seemed unimaginable—the replacement of the floppy drive as the industry interchange standard (especially when a 2 MB CompactFlash card sold for $150)—but also for its mention of digital cameras, apparently the only reference to these devices in all three issues. Some great archaic terminology here, too, such as CompactFlash cartridges and palmtop PCs.

Here are a few more past headlines, focusing on some industry events that, in retrospect, signal a changing of the guard:

“Digital Equipment Cans Top Printer Execs” (Hard Copy Observer, October 1995, page 7): Remember DEC? Remember that the company made printers? From the executive housecleaning described in this piece, it appears that the company, which itself would be sold off in pieces just a few years later, was apparently not too successful in this endeavor.

“IBM Offers Bull-Based Matrix Printer” (Hard Copy Observer, October 1995, page 29): This story had to seem anachronistic, even back then!

“Raytheon Introduces Two New Direct Thermal Color Printers” (Hard Copy Observer, October 1995, page 30): Who? What? This article is proof that the path of innovation is strewn with successes and failures.

“TI Launches Low-Cost Windows Laser, Two New Pro Models” (Hard Copy Observer, November 1995, page 14): Yes, Texas Instruments was once a printer maker, too.

“Lexmark IPO Goes Out at $20, Prospectus Sheds Light on Firm” (Hard Copy Observer, December 1995, page 6): At least a few players survived to play another 10 years. Lexmark’s IPO was nowhere near as lucrative or noteworthy as the Netscape IPO earlier in 1995 (the latter was ranked the sixteenth biggest business event of the century by, but initial investors holding until now (with the stock in the mid-$40s) would have achieved an annualized return of over 15 percent—nothing to sneeze at but not exactly fortune-producing, either.

I can go on and on. Those three issues contain a wealth of information on the state of the industry. And, of course, what’s maybe even more interesting (and more difficult) to discern is what’s not in there that maybe should have been—emerging trends and unseen threats that had yet to appear on the Observer’s editorial radar screen.

What’s the next digital camera buried in today’s media coverage? I plan to follow up over the coming months to see if we can find it.