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July 11, 1997


TVSE to enter inkjet printer market

The Madras-based TVS Electronics Limited, a leading maker of dot-matrix printers, is to soon expand its product range to include inkjet printers.

The core parts of the TVSE-branded inkjet printers will be sourced from the US-based Lexmark Corp. The two companies are expected to sign an agreement for the purpose next month.

Under the agreement, Lexmark will sell to TVSE, core inkjet printer parts on an original equipment manufacturer basis.

The deal is similar to the one between the Bangalore-based Wipro Infotech and Cannon Inc. of Japan, under which the former markets Canon's inkjets in India under the 'Wipro Genius' brand name.

Confirming the proposed agreement during his visit to Madras last week, Peter O'Meara, president, Lexmark Asia Pacific Corp, said his company was keen to enter into a long-term agreement with TVSE. "Even though we are beginning with inkjets, the scope of the agreement could be expanded in the future," he said.

Though not highly visible, Lexmar printers are already available in the country through Indmark Infocom, another TVS group company. Indmark, which focuses on the sales and distribution on non-TVS branded IT products, uses TVSE's countrywide network for providing after-sales support. According to O'Meara, after the Lexmark-TVSE deal comes into effect, Indmark will focus on the sales of Lexmark's high-end products.

The deal with Lexmark is expected to help the Rs 1.16-billion TVSE fill the "gap" in its current range of printer offerings.

"In recent years we have found it difficult to meet all the requirements of our customers with dot-matrix printers. After the agreement with Lexmark, we will be able to provide them with a complete (printing) solution," a senior company official said.

Dot-matrix printers fall into the category of "impact" printers which involve physical contact between the print-head and the paper during the printing process. Non-impact printers (which include inkjet and laser printers), on the other hand, avoid the need for physical contact between the print-head and the material on which the printing is done.

The cost advantage and raggedness of dot-matrix, as well as their ability to print multiple copies, have so far ensured their continued market dominance. However, their market-share has been declining - albeit slowly - ever since inkjet printers made an entry in the early Nineties.

Though running costs of inkjets are higher than that of dot-matrix, the high quality of their output and the availability of the "colour-capable" models have led to a rapid rise in their popularity.

According to market research firm, IDC (India), the share of inkjet printers grew to 18.8 per cent in 1995-96 from 12.9 per cent in the previous year. The corresponding figures for dot-matrix were 72.3 per cent and 76 per cent respectively.

IDC (India) has predicted that sales of non-impact printers will grow by over 70 per cent this year. The growing home PC segment is also expected to favour inkjets.

TVSE, which commands a third of the dot-matrix market, sold over 74,000 units last year. The company, which also makes uninterrupted power supplies and keyboards, has decided to move its printer manufacturing activities from Tumkur (Karnataka) to Madras. Last month, it acquired a facility near the city's airport for the purpose. The new plant is expected to be fully operational by early 1998.

TVSE will be able to leverage its existing countrywide distribution network - consisting of 25 distributors, 100 dealers and 1,200 resellers - for pushing its inkjet range. However, the company will face stiff competition in the non-impact printer segment from existing players such as Hewlett-Packard, Epson and Canon.

HP currently dominate the non-impact segments with over a 70 per cent market share followed by Canon. Epson and Apple. The two Japanese firms recently stepped up their local marketing efforts in an aggressive fashion.

While Canon has launched a TV advertising campaign (a novelty in the Indian printer market) aimed at home PC users, Epson has embarked on a no-holds-barred campaign in the print media touting its "unique" digital technology. Cannon recently set up a local subsidiary with headquarters in Delhi and Epson announced plans to upgrade its liaison office in Madras to a full-fledged subsidiary.

- Compiled from the Indian media

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