In this new series of features with key large-format kit and consumables manufacturers, Lesley Simpson asks how large-format inkjet will be positioned within Epson as it focuses on new technologies and markets.
When you think of Epson do you think robotics, sensing technologies and video projection? Probably not, but they are some of the key growth areas for the nigh on $10bn turnover company whose ‘Epson 25 Corporate Vision’ lays down its intent to drive innovation in these areas as well as inkjet. Only last month (August) it announced its aim to grow robotics into a ¥100bn business by 2025 (see news).
As its president Minoru Usui states on the company’s website: “R&D has to be conducted from both a near-term and a long-term perspective. The outcomes have to support our businesses of today and our businesses 10 or 20 years down the road.” And that means stretching development and market boundaries, something well understood by the company that really became known for developing the quartz watch.
Nowadays inkjet (hardware, ink, media) is Epson’s biggest business sector, accounting for about 67% of its total global turnover. According to Duncan Ferguson, newly appointed executive director, professional printing and robotics, “Inkjet’s percentage of R&D is roughly in line with the size of its percentage of the business.” But, will that change and the focus shift as Epson reaches out into new markets with sexier new technologies like robotics?
Yoneharu Fukushima, MD of the corporate R&D division is on public record saying: “The goal of technology development at Epson is to create the seeds of future business by crossbreeding new and existing technologies to create new platform technologies that are aligned with macro trends and with our own mid- and long-term corporate strategies.” So what exactly does that mean?
Ferguson put it into perspective, saying that yes, it means areas of Epson development like robotics, video projection and sensing technologies are earmarked for growth, but that’s not to say that inkjet will be left behind.
For a company whose large-format (24in+) inkjet printer sales globally per annum is 50,000 - 60,000 it makes sense to retain significant levels of R&D in the technology. The company spends $1.48m per day on R+D across its whole business and Ferguson says inkjet’s share will not be downgraded.
“The level of interest in inkjet won’t decline as other areas grow. PrecisionCore is still a relatively new development so we’re still spending a lot of energy tweaking it for all of the potential markets out there. We keep expanding the markets we target with inkjet and as you know we’ve moved into labels and textiles over the last five years. We have single pass technology. Nothing is off limits in terms of inkjet R+D. The key focus for us now/short-term is cost efficient office products (business inkjet) and industrial printing.”
Asked to define what Epson means by ‘industrial’ Ferguson says: “I use the word ‘industrial’ because others do! In terms of definition it’s very hard, but I’d say it includes functional printing (circuit boards etc.) and printing onto things like metal, glass - but is that graphics or industrial - it’s a confused picture. At Epson we refer to ‘commercial and industrial’. What do we mean by ‘commercial’? - well not what’s meant traditionally by ‘commercial print’…
“In terms of ‘industrial’ I mean application - not huge volume. That’s because when it comes to buying printing equipment you have to consider whether you want one huge machine to do large volumes, or 20 smaller machines to complete that task? As for who does the ‘industrial’ print - it’ll depend on the type of industry. In automotive for instance there are probably only a dozen companies providing their ‘industrial’ print.
“So, when we plan at Epson we don’t plan in terms of ‘industrial’ or ‘commercial’ users etc. We plan in terms of ‘application x’ needs printing - and ask, can we do it? We look at it from this level in terms of sales and marketing too. It means we might want to sell an ’application’ to a market it wasn’t initially designed for.
“In Japan there is a team looking at all new market/segment opportunities, and even in Europe we have a team that looks beyond the markets our kit was actually designed for, because we know the technology can deliver so much more than those for whom it was developed.”
Ferguson adds: “I can accept that PSPs may be afraid of a business model change in that we could perhaps be selling kit to people that might otherwise come to them for services. But we need to look to our own business and where we can take that.”
He refers to a market in constant flux: “Take the photography market. It was the case that many photographers bought large-format inkjet printers because they couldn’t get the service they wanted from their providers anymore. But now they are outsourcing their print again because the contractors are again providing a great service and the photographers have realised that they want to take images, not print! It has come full circle. Our intention is to provide the best products for whoever wants to buy them!
Therein lies the reasoning behind the formation of the Epson Professional Printing Solutions Business earlier this year. By merging its business systems (mainly thermal till printers), commercial business (large-format inkjet and photo minilabs), and industrial business (inkjet labels and textile printers - including relatively newly acquired Fratelli Robustelli) Epson hopes to improve internal knowledge transfer and build a more efficient route to market.
“Learning between the divisions wasn’t great - this should make it better,” admits Ferguson.
“Physically, most of the R&D was in one location in Japan anyway, but sales and marketing were in three places and are now in one location. It means we don’t have clashing strategies. There is one sales and marketing strategy for the whole division, with groups looking after certain markets/products - we try not to be too rigid and to cross-sell. At the moment textiles is still a bit of a separate entity as it’s not fully integrated yet, but it will be.
“As one single division we have more clout. And it means feedback from the division to R&D should be more streamlined.”
And will it help with what Fukushima calls crossbreeding? “There is crossover happening already because the understanding is that we can make strategic gains in doing that,” replies Ferguson. “Some component parts from robotics are already integrated into large-format printers for instance. It you think multi-process, there is certainly something to look at longer-term in integrating print and finishing – though it’s a bigger issue with flatbed printer technology.
So can we expect Epson move into that arena anytime soon? “It’s not an area we’re in today. I can’t say more than that!” laughs Ferguson, clearly insinuating that it’s on the cards.
He’s more open about Epson’s plans in the textile sector. “This is one of our top priorities. There’s so much still to convert from analogue, plus sampling is becoming a real business in Western countries.
“In terms of print production textiles has mimicked what happened elsewhere, with digital benefits like speed, environment… all well known. Now, in Europe, it’s a question of digital textile print becoming more mainstream. In terms of production devices, like the Monna Lisa, it’s about selling them into textile companies. With sublimation printers it’s the same, but we’re also targeting new start-ups in fashion, sport apparel and home furnishings.
“We haven’t looked at the soft signage market… PSPs often want a printer that can handle multiple applications so we have to take that into consideration in terms of product development, and inksets etc.”
Speaking of ink, I asked Ferguson about Epson’s pricing policy given that it reduced the cost of some of its inks when it launched the S Series printers at the end of 2015/early 2016 - “to make the system more competitive” - and dropped prices of its dye-sub inks this spring - “because we’re targeting production users to we have to listen to them if we want them to switch from analogue to digital.”
Epson develops a massive range of inks, including those for minilabs. Ferguson says: “Price, gamut, environment, special properties - balancing that is always an issue. Inks were always the profit generator in the Epson business model, but that model is changing so that profitability is more balanced across hardware too. That business model change is most obvious in the consumer office products sector, but it’s happening in the professional sector too, just slower.”
Another shift as it were in Epson’s strategy is its focus on inkjet printer speed, or rather, productivity. “We have been known for our image quality for years, but speed is a key R&D focus. And by speed I mean designing machines around the whole ease of production issue - so media handling, profile management etc.”
Key to the speed issue has been Epson’s development of its PrecisionCore printhead technology. The heads are built only into Epson printers - and in the latest Robustelli printer shown at Itma in 2015 and just launching - at the time of this interview the latest product name was the Monna Lisa Eve-Tre but that hadn’t been finalised.
“The strategy is to keep the PrecisionCore technology for our own use and we are going to increase the volume we produce,” says Ferguson. But other vendors incorporate Epson’s previous head technology - for instance Epson has a deal with Screen. “Maybe longer-term PrecisionCore will be part of that partnership too,” he concedes.
And where do environmental issues fit into inkjet R&D strategy given that in 2008 Epson established its Environmental Vision 2050 as a guide for action, and has since been working to realise the vision.
“The ethos is that we’ll design products that enable society to feel better about itself and that’s written into our principles. The thing is, there’s so much we can do, but deciding what to develop that is marketable is the issue,” says Ferguson. “We have to pretty much develop products on a worldwide basis so we look at the tightest existing and likely upcoming regulations and design with those in mind - so the S Series uses less ink etc. But we have to remember that what we make needs to be bought.
“Epson technologies are developed with the term Sho Sho Sei (compact, precision and energy saving) in mind. Customers want something that delivers but that still allows them to be competitive. That’s our aim.”