New Scanner Segmenting Addresses Evolving Market

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It’s no secret that document scanners have continued to get better, faster, and cheaper. Back in July of 2007, Kodak announced a new 60 ppm minute unit with a list price of $6,000 [see DIR 7/20/07]. At last week’s Laserfiche Empower event, Kodak Alaris demoed for us a 70 ppm scanner that lists for $1,700—and the new i2820 includes image processing and paper-handling features unheard of even in substantially higher priced models in 2007.

2007 was also the last time that document scanner market analyst Susan Moyse redid her market segmentation. While working for InfoTrends in the late 1990s, Moyse had divided the document scanner market into five segments—with workgroup (rated speeds of 25 ppm or less and priced below $2,000) on the low end and high-volume production (86 ppm and up, and priced above $40,000) on the upper end. In 2007, she redid this segmentation to account for an increasing number of lower priced scanners being introduced into the market. She created a new “personal” segment for scanners priced below $750.

Actually, it’s probably incorrect to define her previous segmentation as based on price, but that was the shorthand we used primarily in our DIR coverage, because speed ratings, especially the ones advertised by vendors, can sometimes become very confusing. Now, as an employee of infoSource, which tracks worldwide document scanner (as well as other hardware) sales, Moyse has updated her market segmentation. And speed, which she has standardized as meaning 200 dpi, binary, portrait pages per minute, is the primary segmenting factor.

“Price is also considered, but it’s really too volatile a metric to base our segmentation on,” Moyse told DIR. “And, there is no industry standard for recommended daily duty cycle, so we really can’t use that. We really wanted to tighten things up, especially at the lower end of the market.”

Here’s what the new segmentation looks like:

Segment

Speed (ppm)

Typical Price Range

Personal

1-20

< $400

Workgroup

21-35

$400-$1,200

Departmental

36-55

$1,200-$3,000

LVP

66-90

$3,000-$10,000

MVP

91-150

$10,000-$30,000

HVP

> 150

> $30

In addition, there is a separate segment for network scanners—defined as dedicated document scanners that are designed to be used primarily through an Ethernet or wireless network connection and include a touchscreen for managing scanning jobs.

Obviously, the lower-end of the market has come down in price (and all the segments have gone up in speed), which is certainly reflective of many of the newer products being introduced. For the first time, Moyse is also including in her numbers mobile scanners that do not come equipped with an ADF. “Mobile scanners have always been a source of controversy,” said Moyse. “There are a lot of differing opinions about what constitutes a mobile product. In my opinion, it’s something that can utilize an alternate power supply [like a battery or USB cable plugged into a laptop].

“The nice thing about the way infoSource makes its market information available is that it’s all in a database that can incorporate different filters. So, if you want to take mobile scanners out of the numbers, you can use a filter to do that.”

We asked Moyse why she chose portrait speeds to segment the market when most vendors prefer to market their scanners with the faster landscape scanning speeds. “Not all scanners can run in a landscape mode,” she said. “Especially in the lower end of the market, but even with some production models, scanners with an A4 design can’t run landscape.

“So, in order to do a real apples-to-apples comparison of all models, we had to standardize on portrait. If a vendor just wants to compare their scanners to other A3 models, there is a filter available for that.”

According to Moyse, the new segmentation, which raises the speeds of what can be classified as workgroup models but reduces the price, helps reduce the number of scanners encompassed by that popular category. “Ultimately, workgroup remains the largest segment, but I feel like we’ve tightened it up by potentially moving some of what formerly could have been classified as workgroup models into the departmental and low-volume production segments.”

Moyse said she also received some requests to classify scanners with outsorting pockets separately. “Most of those models fall into the higher end production segments,” she said. “Those segments are so small to begin with that it didn’t make sense to break them up further.”

Moyse added that infoSource has set up a proprietary formula to account for scanners with prices that fall outside the range in the segment that matches their rated speeds. She noted that for the U.S. market segmentation, U.S. list prices will be utilized. “We are happy to talk to vendors about outliers, like models that might include a flatbed that pushes the price into the range of a different segment. We really just want the segmentation to make sense.”

When we spoke, Moyse was in the process of collecting data on Q4 2015 sales. “That data will be reported on using the previous segmentation,” said Moyse. “But all our forecasting, as well as our reporting going forward, will be done based on the new segmentation. Our subscribers will be able to look at the history of the market utilizing both the old and new segmentations.”

Moyse stressed that infoSource’s numbers are designed primarily for market research. “How the vendors market their devices, as always, is up to them,” she said. “If we consider a certain model to fit in the departmental segment, but they market it as a workgroup model, that’s fine. What we’re trying to do is serve vendors that are looking at market trends to help them with product development. Communicating to customers and end users is something different.

“The problem with the system we have been using is that it has been too open for interpretation. Vendors have tried to position products where they wanted to see them. We found ourselves doing a lot of manual adjustments and this could be a huge pain. This new segmentation really puts a stake in the ground—saying, ‘this is how we look at the different categories of scanners.’”

For more information: http://bit.ly/infoSourcesegments

 

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