HP Announces OEM Deal with Sharp for Light Production Printers

HP announced a major OEM deal with Sharp Corporation for a new line of color and black & white light production printers that will be offered exclusively as part of HP managed print services contracts. The partnership with Sharp is based on the 900 series MFP and is HP’s first high-end workgroup/light production device. HP will initially roll out the products in North America, Western Europe, and Australia with other regions following later in the year as needed.

The series includes four models and a variety of HP solutions including remote monitoring, HP Access control, HP Capture & Route, and several security solutions for example from SafeCom. Sharp and its authorized dealers will initially provide break/fix service until HP and its partners are up to speed.

HP 900 Series

 

HP Color MFP S951dn

HP MFP S956dn HP Color MFP S962dn HP Color MFP S970dn
Print Speed 51ppm 56ppm BW 62ppm Color & BW 70ppm Color & BW
Scan Speed Simplex 85ipm/Duplex 170ipm Simplex 85ipm/Duplex 170ipm Simplex 75ipm/Duplex 150ipm Simplex 75ipm/Duplex 150ipm
First Copy out time 4.1 secs (mono) 

 

5.7 secs (color)

3.7 secs (mono) 4.0 secs (mono) 

 

5.6 secs (color)

3.7 secs (mono) 

 

5.6 secs (color)

Finishing Options Stapler, Saddle Stitch, Booklet Making, Hole Punch Stapler, Saddle Stitch, Booklet Making, Hole Punching Stapler, Saddle Stitch, Booklet Making, Hole Punch, Inserter, Folding Unit, Trimming Module Stapler, Saddle Stitch, Booklet Making, Hole Punch, Inserter, Folding Unit, Trimming Module
Input Capacity 1,100-6,600 sheets 1,100-6,000 sheets 2,400-8,600 sheets 2,400-8,600 sheets

MPS Only

HP has long had a gap in its product line for A3 higher volume and more fully-featured workgroup/light production printers with strong finishing capabilities. The 900 series is the result of the demand from enterprise customers that require a single MPS provider and HP’s need to expand its higher end enterprise offering. HP estimates 13% of the devices they currently manage have high enough monthly print volume (around 10,000 pages month) to benefit from the 900 series.

HP will not be making the 900 series available to non-MPS customers or through non-MPS channel partners. Also, HP is not announcing pricing for the products. The company intends to include the product as part of MPS contracts that will be negotiated on a customer-by-customer basis based on volumes, services, and other factors. HP was non-committal on its longer term plans for the product line for non-MPS customers.

Why Not Canon?

HP indicated its decision to go with Sharp was based in part on HP’s requirement to be able to directly service an HP-branded product and have “HP solutions” built around the product. HP stated its relationship with Canon remains very strong, but that Canon was not willing to provide product on the terms HP deemed necessary.

InfoTrends Opinion

This move is all about growing share in the MPS market which has become the dominant method for selling and servicing enterprise customers. HP was losing deals and/or pages to vendors that could offer a “balanced deployment” that included light production equipment. Canon has been increasing its efforts in the enterprise MPS market, particularly since acquiring Oce, and appears unwilling to supply its long-term partner in this area. Sharp, on the other hand, has a limited presence in the enterprise MPS market and much to gain from a supplier relationship with HP.

HP’s market strength and a solid light production product should be a winning combination, but HP has been down this path before. From 2004 to 2006 HP sold rebranded Konica Minolta devices equally targeted at print rooms and high-end workgroups. HP only reached market shares in the low single-digit range, suggesting it will take an aggressive MPS offering beyond competitive hardware and the commitment of the channel to make an impact. We also wonder if HP will achieve enough unit volume through an MPS-only/limited geography offering to hit the price points and pages to be competitive with the leading vendors in this segment.

HP is shying away from fully closing the gap between the office workgroup and its Indigo-class production presses. Many corporate print rooms depend heavily on high speed black & white devices in the 90+ppm range. The 900 series will suffice for light volume print rooms, but has its limitations against higher-speed/volume/featured products from Xerox, Canon, Ricoh, and Konica Minolta.

We note that Sharp recently introduced (PRINT 13 in September) its first pure production color systems, the MX-6500N and MX-7500N. The color models HP is OEMing are only slightly slower, but lack the robustness and extended feature sets of Sharp’s production systems. Likewise the monochrome offering is limited to 62 ppm while Sharp offers a full-blown production system up to 120ppm.
HP’s choice might be an indication of a cautious approach not to overwhelm the channel and its service capabilities.

Enterprise customers stand to gain from a more competitive offering from HP with this new line of devices. We expect HP to be aggressive on pricing and bundling in an effort to win deals and build volumes. Existing HP customers should consider rebalancing their existing fleet or extending their MPS contract to include additional capabilities and devices. Any non-HP customers that require high-end workgroup/light production office printing should re-consider HP when their MPS contract is up.

Sharp clearly has much to gain in terms of unit sales and, possibly, future products. The company has been rethinking its approach to market by using alternative forms of distribution (recent relationship with Tech Data) in an effort to streamline costs and drive volume. The partnership with HP gives Sharp access to a customer base (enterprise MPS) that it would likely not be able to reach effectively on its own.

The other vendors are facing a more competitive market. HP has been aggressively pursuing MPS contracts and willing to tolerate some loss in share from not having a full product range. With a broader product range, HP stands to grow its share in the zero-sum game of MPS and will be able to play in the same customer base as the A3 copier legacy players with a full balanced deployment in MPS. HP is now a more formidable competitor with their combination of brand, technology (business inkjet, office and light production laser), and software solutions. We anticipate the other vendors will increasingly look to leverage their high-end product line and service capabilities as one means of differentiation.

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