Here in the office printing analyst community, few forecast drum beats can be heard as loudly as claims of the imminent consolidation of copier vendors and the looming obsolescence of the A3 format.  These forecasts have gained increasing clout during the last year as the floundering economy expedited Oce’s path to acquisition and the emergence of new A4 MFPs, such as Sharp’s Frontier series, prompted analysts to proclaim that A3s were finally on their way out.  Although there is very justifiable evidence behind each of these forecasts, one of the most compelling arguments that both have come to fruition occurred in February when Panasonic announced that it was finally exiting the A3 MFP-Copier market to capitalize on the growth opportunities that lie in the A4 space.

From a 10,000-foot view it seemed pretty clear.  With one announcement, Panasonic encapsulated two of the most common theories surrounding the office printing space and became the first milestone in a pair of major transitions that are set to change the office printing market forever.  However, as with many apparently clear harbingers of change, the closer you look at Panasonic’s announced transition, the less straightforward the motivations behind it are.

Although Panasonic was never a copier market powerhouse, the manufacturer’s investment into the A3 space was clearly waning for the last five years before reaching its official nadir earlier this year.


On the product side, Panasonic’s actions did not reflect those of a company with intentions of growing within the copier market.  Panasonic launched just 12 new A3 MFPs between 2007 and 2010, all of which were closely based on their predecessors and provided no notable specification or feature improvements.  To put that into context, since December 2009 Xerox, Canon, and Ricoh have launched 13, 12, and 6 new A3 systems, respectively, and Ricoh is expected to launch another four MFPs in the coming months.  Additionally, Panasonic resisted expansion into departmental segments, sat as a spectator as vendors migrated to the light production arena, and never launched a true third party development platform.


Panasonic’s Old A3s


One thing that may surprise folks in the A3 obsolescence crowed is that Panasonic is not shifting its focus to the type of A4s that will theoretically replace copiers.  Instead the vendor is planning to expand its current SOHO lineup, launching a variety of new desktop models that will sell through IT resellers, its Panafax channel, and will even reportedly include a substantial retail channel push (and they thought direct sales were expensive!).


Panasonic’s New A4s

Given the market share race and manufacturing scale pressures that face current A3 MFP manufacturers and the hardware cost advantages of A4 MFPs, it is almost certain that vendor consolidation and an engine format shift will continue.  However, Panasonic’s exit from the copier space and increased commitment to A4 printers should in no way be viewed as a move from a company that really had a choice.  Going forward there are certainly a handful of A3 vendors with low enough market shares and limited enough manufacturing scale that their future may be in doubt, but none are anywhere close to where Panasonic was in 2005 (nevermind 2010), so its safe to expect a substantial slowdown in vendor consolidation until the next recession.  Meanwhile, the expected transition to A4 MFPs is already occurring, but it will likely take the form of more balanced A3 and A4 product and fleet lineups as manufacturers look to provide the right hardware solutions for their clients’ needs.  It will not be in any way as abrupt as Panasonic’s recent transition – especially not until A4s can rival A3 systems’ usage costs, speeds, and high volume capabilities.