Commentary & Analysis
Konica Minolta: Moving into Production and Industrial Print
In this article, David takes a look at Konica Minolta and the company’s new strategy relative to Production Inkjet, Industrial Print, and building a Software eco-system, with a different approach than its competitors.
By David Zwang
Published: September 8, 2016
I recently had the opportunity to attend the Konica Minolta Dealer Convention in Aspen CO. For me, it was interesting on many levels. First of all, I have never really spent a lot of time studying or writing about Konica Minolta, since the majority of its product line had been devoted to A3 and A4 multifunction machines. However, over the last few years, the company has been rapidly expanding into production press products. In fact, at drupa, Konica Minolta made a pledge to target Commercial and Industrial print markets. So I thought this was a great opportunity to dig deeper into its products and plans. So, in the beautiful surroundings of the Aspen Institute, I got a deeper understanding of the Konica Minolta approach to marketing, sales and futures, along with some welcome distractions.
At the start of the conference, as he did at drupa, KM President and CEO Shoei Yamana pledged a significant growth target of $500M in Commercial and Industrial print products over the next 3-4 years. This is an impressive goal, and one has to wonder whether the company will be able to achieve this with its current and extended product lines, or whether the plan is to achieve it through an additional acquisition beyond the 41% share of MGI Konica Minolta currently holds. Konica Minolta seems to have beaten the odds before. Its rapid push into color light production with the bizhub C8000 in 2010 and its partnership with Komori on the KM-1 (now called the AccurioJet KM-1) come to mind.
One of the most interesting things I learned at the event is how dedicated KM is to using the dealer channel to grow its business. The concept of a dealer network makes sense, in that dealers provide more feet on the street to sell and support equipment. The difficulty for many companies has always been how to train and support dealers. Konica Minolta is using a deep learning process, partially by using the existing installed base to glean the necessary knowledge and best practices. In the U.S., KM under the US leadership of Rick Taylor, who came out of the dealer channel, has invested significant resources into developing a training and support infrastructure, and sees the dealer network as a real partner. The company expects the dealer channel to not only sell MFP products, but also production and industrial. While it is a big challenge for both KM and the dealers, it has the potential to offer significant opportunity for both as well, and it is a pretty unique approach to the market.
Konica Minolta’s initial entry into light production with the bizhub c8000 in 2010 was received with market skepticism but eventually took hold, became a great success, and made the competition take notice. The recently introduced bizhub PRESS C1100 is an impressive successor to the C8000 in the toner-based digital press market. It offers a high output rate of 100 impressions per minute on media ranging from 55gsm to 350gsm.
Additionally, Konica Minolta has recently introduced the bizhub PRESS C71cf color digital label press, built upon its proven digital production press engine. At approximately $400K with some finishing, this is one of the lowest cost roll-to-roll color label printer solutions in the market. The initial market reaction has been great, with over 15 installed to date. KM is working with finishing partners to create total label package/solutions. Currently systems are working with Spartanics for laser die cutting, Aztech for rotary die cutting, and Grafisk Maskinfabrik for semi rotary die cutting. KM is working with others as well, and I would expect more announcements to be made in the near future. The C71cf currently ships with EngageIT iLabel software co-developed in partnership with Hybrid Software.
The systems discussed above are a great base of internally designed production products to begin KM’s transition, but the company has a lot more product to offer now and more to come. To identify Konica Minolta’s new line of production and industrial products and differentiate them from the Office MFP line, KM has created a new brand, Accurio. Its toner based machines in this line will be branded Accurio PRESS and its production inkjet presses will be branded AccurioJet. Their first press with the new branding is the AccurioJet KM-1, which was announced as a saleable product at drupa 2016.
The next branded product is the C2070 Accurio PRESS is a full color product that prints on paper and envelopes. It supports media up to 350 gsm, has a 3,000-sheet high capacity stacker, and comes with semi-automated front-to-back registration and skew correction. This press has already been certified with Plockmatic finishing solutions, which are also compatible with the bizhub PRESS C1100 and 1250 series. KM will be introducing a new EFI Monochrome Controller; however, customers can also select a CREO or KM DFE instead. KM will likely rebrand some of the other production machines and add new ones to the Accurio PRESS line over time.
InfoTrends projects that there will be a 38% CAGR in the B2 inkjet market through 2020. So it is no surprise that KM has been working on an inkjet platform and products that will address this increasing need. Its joint development of the AccurioJet KM-1 with Komori started well before drupa 2012, where it was introduced as a technology demonstration. The KM-1 is a 23 x 29 1/2 B2 + UV sheetfed inkjet Press, which supports 6 letter pages vs. only 4 up on a straight B2-sized press. It has a maximum speed of 3000 sph, and a wide media latitude without the need for any precoat since it is UV. KM sees this as an excellent candidate for producing photobooks and greeting cards.
With only six months in the market, Konica Minolta is already seeing a lot of interest and expects to have eight of these placed shortly. There has been a beta unit in place for well over a year and KM has learned a lot about what it takes to install, use and support this new press. Part of this learning process has been to develop a non-threatening way to help the dealer network to support these presses. Since at least half of all of KM sales are through its dealer network, the company has been working with a neutral third-party company to support these presses in the field instead of having the dealer work with KM directly. This removes the appearance of any conflict, where the dealer might be concerned that the account could be converted to a KM direct sale.
Konica Minolta is expecting a lot of placements for these presses over the next few years; however, the company hasn’t stopped there. At drupa 2016, KM showed the AccurioJet KM-C. This is a B1 sheetfed press that supports 6 colors; CMYK, White and one additional color. This UV press will run at up to 2200 sph, and is targeted at packaging. It is capable of printing on various types of presentation boxes and thin corrugated boards.
The MGI investment was apparently designed to give KM a jump start in a number of technologies. KM recently strengthened its investment in MGI, and now has a 41% share. While this investment will show returns with some of the new JetVarnish modular printing and embellishment systems that MGI introduced at drupa 2016, it also gives KM a direct path to more complete system design in conjunction with its own printing equipment.
MGI offers a wide range of systems, with an entry level MGI Meteor toner based printer at an MSRP of $149.9K. starting at a 26" sheet size rated at up to 70ppm, and topping out at about $1.5M for a top of the line 29” JETvarnish Evolution modular system designed for commercial print and packaging. The JETvarnish line can also support the new Smart Scanner, which compares the original PDF file with the output and adjusts accordingly to ensure precise registration for the embellishment.
AccurioPro and bizhub Marketplace
President Rick Taylor emphasized that with Konica Minolta, it’s not just about the box. It’s about Total Value Sales. In KM’s experience, the margins on printers increase significantly if they can be combined with other offerings. As a result, KM has been working on a number of ways to increase the availability of software and service offerings for both its MFP market with the bizhub Marketplace as well as the new and growing production and industrial print market with AccurioPro.
Both the bizhub marketplace and AccurioPro software are designed to create an ecosystem of interconnected software and service offerings for the respective markets. In KM’s words, it’s a “Smart Workflow Platform.” Over time, the goal is not only to create an interconnected world of processes, but also of product. As we have started to see with other companies, KM is looking to aggregate and deliver data across connected organizations to add value to operations.
In much of the bizhub Marketplace, KM has used partnerships with third-party companies and solution providers. The company expects all of its products to have a common software platform by 2017 to help support this. KM estimates that 750K printer installations can be transformed/replaced with a new IoT (Internet of Things) hub, and has been developing and promoting solutions toward that end. In the case of AccurioPro, KM has been doing a lot of its own development as well as using preferred partners. The company already has a JDF/JMF Controller and a Device Job Management Module, and other software modules. Expect a lot of new AccurioPro software offerings in the future. Additionally, while KM has been working with tier one preferred partners to bring its offerings into the new interconnected ecosystem it is creating, the company will be moving to tier two partners next, and then offer SDKs and APIs for others (even customers) to develop against and integrate with. KM has also started to develop an infrastructure and focus on IT and Managed IT services with some success.
More to Come …
Konica Minolta, some would say quietly, has been building significant product and services offering, not just for its traditional office MFP market, but also for production and industrial print. It will be interesting to see if the company will be able to reach the goal set by Yamana-san, and whether it will accomplish that with existing and new offerings or additional acquisitions, or a blend. It will also be very interesting to see how its go-to-market strategies play out over time in the production and industrial print market. This is an area that can be a stretch for many dealers, but with the proper support from KM, it could be a winning strategy for both.
I will be bringing you more detailed information as we have done in the past about the solutions shown at drupa, to help you prepare for your investigation into production inkjet and other investments. As a refresher, I would suggest that you do a ‘review’ of the original production inkjet and workflow series. It not only covers the vendors and machines that have made it to market, but also the driving technology, requirements and impediments.