Tuesday, November 17, 2009

Regarding Canon's announcement that it is buying OCE

Well, this deal was "major news" to reprographers! Caused a lot of e-mails flying back and forth.

One friend, who is in the reprographics business in Europe (owns a very large enterprise), was not happy about the deal - said that Canon offers low/mid quality equipment and poor customer service, and that OCE offers outstanding equipment and good customer service.

Just to the opposite, two friends in the U.S., both of whom are senior executives - and "players" in the reprographics business/industry - had a different point of view - they (basically) said the same thing - they are not unhappy about the deal - they said that OCE has been difficult to deal with and Canon easy to deal with.

Okay, what do I think about this deal? (Not that anyone cares what I have to say about this deal, but, this is my blog and, in typing this post, I get to practice my typing, if nothing else.)

OCE (for the most part) makes excellent, reliable, dependable, high-end, mid-range and low-end, large-format imaging equipment. OCE also makes excellent, reliable "higher-end" small-format imaging equipment (higher range cpm/ppm copiers and printers and transactional digital printing equipment.) In 2005, OCE paid around $685 million to acquire Imagistics, and, with that acquisition came Imagistics' (formerly called Pitney Bowes) line of mid-range and low-range copier/printers. I thought that was an "interesting" deal, for OCE paid a lot of money to acquire what was, essentially, a crappy line of low and mid range copier/printers. Not nearly engineered as well as OCE's own small-format equipment. And, they paid a lot of money for Imagistics. That deal never made any sense to me. Yes, there are some that would say that that particular marriage allowed OCE to "fill out its line." But, why do that when the equipment isn't as good as the stuff they were making themselves? One of my friends said that part of OCE's financial-results-problems were being caused by that acquisition (lower margins.)

Canon makes excellent quality, mostly reliable, small-format imaging equipment. I'm not a fan of Canon's toner-based wide-format imaging systems. I do like Canon's ink-jet wide-format equipment.

FUTURE REVISED LINE-UP FOR CANON PRODUCTS (OCE stuff included)?: (these are simply my opinions as to what's going to happen, post-acquisition):

The comments below do not talk about OCE's "display graphics" equipment business. That's because this blog is devoted to the "reprographics" business and industry and because "display graphics" still only accounts for probably less than 20% of reprographics industry revenues.)

1) the Imagistics line-up of low and mid range small-format, copier/printer equipment (which was re-branded OCE after OCE bought Imagistics) will be discontinued. Absolutely no reason for Canon to keep that stuff, since Canon already covers that range of equipment and since Canon's own stuff is better. (That will also put a lot of people out of work, I think, due to consolidation of sales, service and manufacturing - i.e. "consolidation.") (Comment: Imagistics, $685 million down the drain.)

2) Canon will probably stop manufacturing it's toner-based large-format imaging systems - since OCE has superior equipment. (That will also put a lot of people out of work, I think, due to consolidation of sales, service and manufacturing - i.e. "consolidation.")

3) Canon's large-format imaging, ink-jet based imaging equipment may likely be merged with OCE's current line-up of large-format, ink-jet based imaging equipment (here, I'm referring to the equipment primarily used for CAD plotting/printing.)

4) The merger of OCE's "FM" business with Canon's "FM" business will create a very, very significant player in the FM business. For my reprographer friends in the U.S., I hope that the Canon/OCE "FM" business will stay out of the A/E/C market space (For my European reprographer friends, I'm hoping that Canon will discontinue OCE's FM business in the A/E/C market space in Europe - but I'm not going to hold my breath on that one.)

All in all, a VERY interesting deal. Two, well-respected companies, combining forces.

When Ricoh purchased IKON, that took some of the wind out of Canon's sails (since IKON was a dealer for both Canon and Ricoh equipment and IKON stopped selling Canon equipment sometime after that deal happened.) So, the Canon/OCE deal helps Canon in that respect (picks up some of the market share that Canon lost when Ricoh bought IKON.)

No comments:

Post a Comment