Brother to spend €599m in assault on printer market

19 Jan 2007

Japanese office equipment manufacturer Brother has said it is planning to spend nearly €600m as well as boost research and development (R&D) spending by 46pc in an all-out bid to capture a significant slice of the world laser business.

In Spain this week the company unveiled a new range of colour laser printers at a pan-European press conference, reinforcing its commitment to an increasingly competitive market.

On show were the HL-4040CN and HL-4050CDN, the first colour laser printers to include Brother’s own colour engine. Previously, it sourced the technology from other manufacturers like Hitachi. Brother has taken the decision to build its own product in its entirety at a time when colour laser accounts for 15pc of the print market with only HP growing faster in the segment in terms of value and units.

“We have always been a company that has evolved steadily and we felt the time was right,” said Yuji Furukawa, chairman of Brother. “Together with our mono lasers we can now provide the full service to the customer. This year, colour laser will be the big hit from Brother.”

Brother expects the new range to gain them 10pc of the colour laser printer and multi-function category in Western Europe. There will be a range of models with different functionality though all will have network capability as standard. Products are expected to launch in Ireland in the early Autumn.

The company also used the event to announce a 46pc increase in R&D funding – totalling €685m – and an allocation of €599m of to support its ambitions in the colour printing market and new generation technologies.

The announcement of the company’s strategy comes as it prepares to reveal a year of record sales and profits. Worldwide, Brother is forecasting sales of €3.7bn with profits of €175m, with more than €1bn of sales coming from Europe alone.

The company will continue to develop it multi function range – the single units that combine fax, printer, copier and scanner – though it stressed the stand-alone market was still strong.

Black-and-white printing is also holding up well, according to Brother; after the colour boom of a few years ago people are recognising that there are savings to be had in mono form laser printers that are better quality than inkjet and increasingly affordable.

Brother specialises in the SME (small to medium-sized enterprise)) and SoHo (small office, home office) market. It was established in Ireland 49 years ago as a sewing machine manufacturer.

Sean Sheehan, managing director of Brother Ireland, said: “We have the largest dealer network of any manufacturer in Ireland. We’re very strong in the channel because we’ve been committed to it in Ireland for decades.”

A strong reseller network is increasingly important in a market where price erosion has been a characteristic of the last few years. Aldo de Smedt, researcher from GFK, said prices have bottomed out but painted a bleak picture. “None of the print companies are making money by selling printers and more and more third party companies are eating into their profits in consumables,” he told

The high price of inkjet refills, for example, has been a tidy revenue stream for manufacturers but as third-party manufacturers dramatically undercut the branded product it is a revenue source that is becoming less secure. The price of branded cartridges has created some interesting anomalies. It can be cheaper in some places to buy a new printer than a refill cartridge from the manufacturer.

Sean Sheehan said: “It’s about how we convince the end user that they should buy the branded version. It’s about good quality and long life. You will see us developing some marketing around this is the next 12 months.”

By Ian Campbell

Pictured – Sean Sheehan, managing director, Brother Ireland