The Future of Thermal Printing - 2014-19

The Future of Thermal Printing -“A View from the Shark Tank”

Presented ByEndre D. Vargha

GMR Management Consulting

25th Annual Thermal Printing Conference, November 17 – 19, 2014

The Sharks

The Offer: “30% Equity for $32.8 billion”

Kevin O’LearyMark Cuban

Daymond John

Robert Herjavec Barbara Corcoran

2GMR Management Consulting ‐www.gmrmanagementconsulting.com

Presentation Outline

• Market Overview• Key Players• Recent Developments• Market Drivers• Technology Trends• Threats and Opportunities• What’s Next?


Market Overview – Historical Perspective

Militaryand

ScientificApplications

TI DevelopsTPH IC

CalculatorDisplay

DT FaxDT/TT Barcode PrintersTT Color

TT FaxCard PrinterPOS /Kiosk Printers

TT ImprintMobilePrinting

D2T2PhotoPrinters

RFID Smart Labels

IncrementalImprove‐ments

1960s 1970s 1980s 1990s 2000s 2010s

Key Milestones


Market Overview

• Three Different Printing Methods – Same Fundamental Technology• Direct Thermal (DT)• Thermal (Mass) Transfer (TT)• Dye Diffusion Thermal Transfer (D2T2)

• Market Components• Printers (incl. service)• Supplies DT/TT/D2T2


Market Size – End User Prices

24%

33%

31%

12%2014 Worldwide Sales $32.8 B

Printers DT SuppliesTT Supplies D2T2 Supplies

23%

35%

31%



Source: Smithers Pira6GMR Management Consulting ‐

www.gmrmanagementconsulting.com

Market Size – Manufacturer’s Prices

44%

27%

22%



42%

30%

21%



GMR Management Consulting ‐www.gmrmanagementconsulting.com 7

Source: Smithers Pira

Key Players• Printer OEMs

• Zebra Technologies (USA)• Sato Holdings Group (Japan)• Seiko Epson Corporation (Japan)

• DT Media Manufacturers• Oji Paper Company (Japan)• Hansol (Korea)• Kohler (Germany)• Appvion (USA)• Mitsubishi (Japan)• Ricoh (Japan)

• TT Media Manufacturers• ARMOR Group (France)• Dai Nippon Printing (Japan)• IIMAK (USA)• ITW (USA)• Ricoh (Japan)

• D2T2 Media Manufacturers• Dai Nippon Printing (Japan)• Kodak Pension Plan (UK)


Recent Developments

• Industry Consolidation & Divestitures Continues• Zebra Technologies acquires Motorola Solution Enterprise Business• Bemis sells MACtec to Platinum Equity• Honeywell completes the purchase of Intermec, Inc.• Datamax‐O’Neil acquires Source Technology’s barcode printers• Printronix is sold to Corona Investment Partners• Sato acquires Argox


Market Drivers

• Global Economy Growth 2014‐19 GDP Projections 3.3 – 3.8%

• ASIA 6.5 – 6.8%• N. America 2.3 – 3.1%• L. America 1.3 – 3.0%• W. Europe 0.8 – 1.9%• E. Europe 2.7 – 3.9%• ROW 2.7 – 3.9%

Source: IMF


Market Drivers

• Productivity Improvement (ROI) • Customer Service • Wireless Communication • RFID• Security Concerns• Product Safety & Anti‐Counterfeiting• Innovation, media & applications• Government Regulations (sometimes)


Technology Trends• Internet of Things (IoT)• Near Field Communications (NFC)• Cloud Computing, Big Data• Wearable Devices• Low Power Sensors• Mobile Applications• Smart Machines• Printed Electronics


Internet of Things

• IoT is the third wave of IT‐driven competition using smart, connected products

First wave: the automation of individual activities

Second wave: the rise of the internet with inexpensive and ubiquitous

connectivity

Third wave: the dramatic improvements in product functionality and

performance


What Are Smart Connected Products?

• Three core elements:

Physical components, mechanical and electrical parts

Smart components, sensors, microprocessors, data storage, software, and

embedded operating systems

Connectivity components, ports, antennae, and communication protocols

• One‐to‐One• One‐to‐Many


The IoT Technology Stack

Smart Product Application

Rules / Analytics Engine

Application Platform

Product Data Database

PRODUCT CLOUD

Network Communications

CONNECTIVITY

PRODUCTProduct Software

Product Hardware

Identity &Security

ExternalInformation

Sources

Integrationwith

BusinessSystems


What Can Smart Connected Products Do?Autonomy

Optimization

Control

MonitoringSensors and externaldata sources enable the comprehensive monitoring of:• Product’s condition• External environment• Product’s operations &

usageMonitoring also enables alerts and notification of changes

Software embedded in the product or in the product cloud enables:• Control of product

functions• Personalization of the

user experience

Monitoring and controlcapabilities enable algorithms that optimize product operations and use in order to:• Enhance product

performance• Allow predictive

diagnostics, service and repair

Combining monitoring, control and optimization allows:• Autonomous product

operation• Self-coordination of

operations with other products and systems

• Autonomous product enhancement and personalization

• Self-diagnosis and service


Explosion of Connected Devices

Source: BI Intelligence Data from Gartner Research17GMR Management Consulting ‐

www.gmrmanagementconsulting.com

Zebra Technologies ‐ ZATAR

• ZATAR is a cloud based infrastructure that enables users to connect devices to the internet. Launched in Oct. 2013

• ZATAR is an open software platform for development of IoT

• ZATAR’s main components are:• ZATAR Gateway• ZATAR API• ZATAR Web App


Implication for Printer OEMs• Need to rethink their business models, identifying new opportunities for creating and capturing value.

• Examples:• GE invested in its “industrial internet” linking tasks and equipment creating more than $1.5 billion incremental revenue

• Google Nest thermostat creates value by digitizing the entire home‐temperature‐control process.

• Sonos wireless music systems place the user interface in the cloud enabling users to control the portable speakers from a smartphone.

• Philips Lighting users can control lighting hue light bulbs via smartphones.• Tesla vehicles in need of repairs can autonomously call for corrective software download or send notification to the customer for valet to pick up the car.


Near Field Communication (NFC)

• NFC is an offshoot of RFID designed for devices within close proximity less than 8.0” (0.2 m)

• Initially standard was established in 2004 by mobile phone makers.

• First NFC phone introduced in 2006 by Nokia

• Two communications modes active and passive


Uses of NFC Technology


NFC Changes the Credit Card System• Status quo – The magnetic stripe cards virtually unchanged since 1970s in USA

• “Chip‐and‐PIN” EMV smart cards introduced in Europe in 2004 reduced fraud by 80%

• Massive security breach and credit card fraud resulted in the US banks moving to EMV payment system by October 2015.

• EMV has better security, but 100% secure• Most new retail card terminals will have NFC option built in – enters Apple Pay

Smart Card POS Terminal


NFC Changes the Credit Card System

• Smart Card Fraud


NFC Changes the Credit Card System• Apple Pay using NFC is secure and fraud

resistant• Needs fingerprint on iPhone to make a

purchase• Apple most likely will introduce the

“AppleCard” to compete with Visa, MC, Discover and AMEX with 2% discount on every purchase

• Merchants will promote ApplePay to customers who save money and the iPhone may actually pay for itself


NFC Applications are Expanding

• Lost bags cost airlines $2.58 billion annually

• IATA InBag program includes permanent tags using NFC enabled phone and app allowing the traveler program the tag

• Includes LCD display has 1D barcode and passive NFC chip with multiple technologies

• British Air rollout planned for late 2014

Permanent Bag Tag


Threats and Opportunities


Threats ‐ DT

• Direct Thermal• Internet eReceipts(POS/Kiosk)

• Long‐term image stability (outdoor use)

• Lack of acceptable color (inkjet)

• NFC (bag tags, shelf labels)


Threats ‐ TT

• Thermal Transfer• Ecology concerns (solid waste)• Data security (latent image)• Competing technologies (laser)• Direct thermal


Threats – D2T2

• Dye Transfer• Smart phones (social media)• Competing technologies (inkjet, laser)

• Ecological concerns (5x image size)• Speed, cost (1 hr photo finshing)• User’s experience (Kodak’s exit)


Threats ‐ Common

• Market saturation – printers (commodity prices)

• Industry consolidation – capital allocation

• Lack of “breakthrough” innovation (ZINK)

• Overcapacity in DT & TT supplies manufacturing

“Long product lifecycles, market saturation, and high penetration rates paint a gloomy future for AutoID hardware vendors that disregard the need to revise their go‐to‐market strategies. “

VDC Research


Opportunities ‐ DT

• Direct Thermal• Mobile applications• Linerless media• Multi‐color• Value added alternative to competing technologies


Opportunities ‐ TT

• Thermal Transfer• Harsh environment applications• Security printing• Mobile printers• Packaging automation (integration)


Opportunities – D2T2

• Dye Transfer• Photo I.D. card printing• Decorative products• Event photography• Museum quality photos


Opportunities ‐ Common

• IoT – Industrial printers• Underserved markets (Asia & Africa)

• New applications & innovation (anti‐counterfeiting, security)

• Managed Print Services (cloud printing)


What’s Next?

• Increased price competition among existing players and new entries to gain market share

• IoT will give a short term boost to the barcode printer market• NFC will be a disruptive technology to POS receipt printing market• New profit pools will be in niche application, such as security printing, printed electronics, harsh environment applications

• Competitive technologies mainly inkjet and laser will advance their penetration industrial applications requiring color

• Industry consolidation & divestitures will continue


Thank You


The Future of Thermal Printing - 2014-19

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