New Plate from Heidelberg to Compete with Presstek, Good for DI Market (Includes WTT Analysis) Plus, A Big Week at Presstek: Relationship with Xerox Ends, Secures KPG as a Partner and Gains Heidelberg as a Competitor, comments by John Zarwan March 17, 2003 -- (WhatTheyThink.com) -- At CeBIT in Hanover, Heidelberg presented the Quickmaster DI 46-4 Pro digital offset press with a package consisting of the new Saphira Caleidoplate 46 plate material and innovative format-dependent spooling of the printing plate role. 1,800 Quickmaster DI units have been installed worldwide. The Saphira Caleidoplate 46 is an optional new plate material that will be available in the second quarter. Heidelberg will offer customers a choice of two different plate materials. Joerg Daehnhardt direct imaging product manager, Heidelberg USA said that the Saphira Caleidoplate 46 plate material will reduce the total cost of ownership for printers investing in their DI presses. The printing units of the Quickmaster DI 46-4 Pro are equipped with four plate cylinders, each with an integrated printing plate roll. Until now, the supply of plate material these cylinders contained was enough for exactly 36 consecutive print jobs. The new V 3.0 press software now supports format-dependent spooling. The plate spooling mechanism adjusts to the size of the document to be imaged, eliminating the need to spool a complete plate in full format for every job and thereby also cutting consumption. “We plan to offer the Caleidoplate product in the U.S. later this year. We’ll have specific details about availability plans in the near future," said Daehnhardt. The Caleidoplate will initially be available for the Plus and Pro versions of the Quickmaster DI. “Heidelberg plans to offer the new plate for the Classic version at a later date,” said Daehnhardt. He declined to name the manufacturer of the Saphira Caleidoplate 46. Ed Marino, CEO of Presstek stated, “The big picture is that a choice in products further illustrates our belief that the legitimizing of DI is taking hold. It’s a good signal that DI is now mainstream.” WTT was told that the Saphira Caleidoplate 46 plate material was shown at CeBIT under a protective glass, keeping attendees (and competitors) from examining the product closely. Marino continues, “We have been at this since 1995, so we know that Presstek’s DI products will stand on their own. We have not examined the product, but we’ll let the scientists determine its competitive position against Pearldry Plus.” Asked if there would be potential patent infringements and a replay of a legal event similar to the Creo/Presstek battle, Marino said he does not have adequate information to comment on that front. "What I can say for certain is that Presstek has a significant portfolio of intellectual property in the area of media around the DI. It is our obligation to our shareholders and employees to defend our patents as necessary." Marino also said, "Heidelberg's news is good for the marketplace and presents even more opportunities for Presstek.” -------- WTT Analysis Last week, it was announced that Kodak Polychrome Graphics (KPG) would begin marketing, selling and servicing a direct digital imaging press and related consumables in the United States and Canada. The two-page, four-color Ryobi platform DI press is enabled by Presstek's patented ProFire imaging and thermal plate technology. The KPG partnership is viewed by experts we spoke to as a big win for Presstek. KPG executives were unavailable to speak at press time. We hope to have more comments from them soon. Marino says that KPG's service, technical support, and sales organization are among the best in the industry. An hour later, Presstek and Xerox announced that Xerox will no longer sell the DocuColor 233 DI-4, DocuColor 400 DI-4 and DocuColor 400 DI-5 presses and related consumables, all of which had been sourced through Presstek. Order-taking for the products ended immediately. The Xerox announcement was viewed by some in the financial community as negative, mainly because the Xerox name showed up on the newswire. This gave the perception that the financial impact would seriously damage Presstek. While we assume that a player as large as Xerox would have sold numerous presses, thus resulting in a significant negative financial impact to Presstek, we have been told Xerox had less than two dozen DocuColor DI presses either installed or in demo rooms.  This has little financial impact for either Presstek or Xerox. As explained above, Heidelberg presented the Quickmaster DI 46-4 Pro digital offset press with a package consisting of the Saphira Caleidoplate 46 plate material and format-dependent spooling of the printing plate role. This is an alternative to the Presstek PearlDry Plus for its Quickmaster DI, and Smart Spooling software that cuts the amount of plates used. >>>> We asked John Zarwan, WTT contributing columnist and analyst to explain what this means for the printing industry. "Heidelberg's announcement of a new, non-Presstek plate for the QM DI surprised many in the industry. Offering their own plate fits very well with Heidelberg's overall strategy of meeting all needs of their customers; this includes offering appropriate consumables. "The investment in this technology, both by Heidelberg and their unnamed plate supplier, shows a commitment to DI technology; more importantly, it provides a further validation of on-press computer-to-plate imaging. This should provide a boost to the technology and to the category, which has not been as widely adopted as its initial promise. It also removes one of the ostensible barriers to purchasing a QMDI: the cost of the plate and the lack of a second-source supplier of plates. One therefore expects that this announcement will lead to increased sales of QMDIs. "Heidelberg's pricing strategy hasn't been announced and, in any case, will likely differ country to country. They have typically focused on total cost of ownership, and they now have more opportunity to do this with QM DI. This can be implemented in a number of ways: - lower plate price - "bundled" systems, including presses, software, consumables, service - lower plate consumption through their Smart Spooling software "What will be the effect on Presstek? It can only be good. True, Presstek will lose market share of direct imaging plates. But, if more printers adopt DI presses - which are synonymous with Presstek - Presstek wins, both as a supplier and licensor of the technology, and through increased plate sales. "We think Heidelberg's announcement holds similar promise for DIs by further validating the category and establishing it as a mainstream technology. Presstek will clearly have to compete based on product performance and value, but it will no longer have to defend the technology. "While Heidelberg says their supplier assures them that the plate and spooling system violate no patents, Presstek has a number of patents around its plates, direct imaging technology, and the delivery system of the plate on press. Presstek also has aggressively defended its patents. We expect that Presstek will carefully examine all aspects of the Saphira Caleidoplate and the Smart Spooling system and will seek some accommodation should they believe they infringe on their patents." 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