Printer OEMs could lose over $13bn to third-party remanufacturers over next 12 months

STAMFORD, USA: Printer OEMs could lose more than $13 billion in the next 12 months as procurement managers and other supply buyers increasingly turn to remanufactured supplies to help them cut costs during the downturn, according to Gartner Inc.

“Because printer supplies produce a higher margin than the product itself, this trend is leading to lower profits for printer OEMs,” said Ken Weilerstein, research vice president at Gartner.

“In addition, there is potential for damage to the printer OEMs’ brand because of poor quality and counterfeits. However, OEMs are well-placed to take advantage of the challenges facing the remanufacturers, and the marketing team must play a key part in this. OEMs already have the advantage of understanding the market, their competitors, and buyers’ preferences.”

Gartner has identified three steps that marketing staffs can use to help their company win back market shares from supply remanufacturers in emerging markets and stop the remanufacturers from denting aftermarket profits.

Step 1. Design a Marketing Campaign That Begins With Education —- During the downturn, organizations, procurement managers, and print supply buyers are extremely cost-conscious. OEM marketers should create a campaign to educate buyers and users.

It will explain why buyers should continue to choose its products, and why these products cost more than those of the remanufacturers. To succeed, the campaign must draw on corporate branding, marketing communications, line of business marketing, partner marketing and field marketing teams, as well as senior management.

Step 2. Execute the Campaign Aggressively — In the minds of some buyers, remanufactured supplies are both less expensive and more environmentally friendly. Original supplies also have substantial cost savings and environmental benefits, and OEMS must present their side of the story effectively.

Beyond branding, OEMs have inherent strengths in yields, reliability and image quality — the same areas where remanufacturers continually struggle to catch up.

Step 3. Utilize PR and Legal Successes Judiciously — Some OEMs work hard to protect their patents and copyrights against remanufacturers, but then fail to explain their legal actions in a way that customers can understand and appreciate.

Even a favorable verdict can damage the image of vendors that come across as bullies. Public relations teams should address the OEM’s efforts proactively and explain the context fairly.

“Remanufacturers will continue to make inroads into the print supply aftermarket if an OEM competes purely on cost,” said Vishal Tripathi, principal analyst at Gartner.

“Therefore, marketing campaigns need to focus on end-user education, highlighting aspects such as environmental friendliness and the importance of third-party certification for yield quality. These OEMs should back this with aggressive marketing that shows strengths while highlighting the quality challenges faced by remanufacturers.”

“Don’t be afraid to play on concerns about counterfeit products and poor print yields,” said Laura McLellan, research vice president at Gartner.

“Marketing against lower-cost competitors is never easy or inexpensive, but following these steps can remind corporate supply buyers why they should choose OEM-produced print supplies.”

Elcoteq Beijing obtains satellite TV reception equipment manufacturing license

HONG KONG: Elcoteq SE, a leading electronics manufacturing services (EMS) company in the communications technology industry, recently announced that the Ministry of Commerce of China has granted the Elcoteq Beijing plant a license to manufacture satellite television reception equipment.

This license enables Elcoteq Beijing to provide its customers with life-cycle support and full turnkey assembly services for set-top boxes. The Elcoteq Beijing plant also assembles flat panel televisions (TVs) as well as provides related supply chain management and sourcing services.

As analogue TV broadcasts are being eliminated in various markets, digitalization support for high definition TV has become more prevalent throughout the world, and TV is used for multi-media and computing functions, the set-top box market is expected to grow. Elcoteq is ready to address this immense opportunity.

The company started consolidating its Shenzhen plant with its Beijing plant early this year, transferring the set-top box capacity of the Shenzhen plant to Beijing. Elcoteq Beijing applied for the license to manufacture satellite television reception equipment and planned for deployment of supporting resources as soon as the project began, ensuring that there was no production interruption or time lost in operations due to the transition.

Elcoteq Beijing was established in 2000 in Beijing, China. It is one of Elcoteq's three volume manufacturing plants in the Asia-Pacific region. The plant specializes in box build and sub-assembly manufacturing for communications products such as RF modules, engines, mobile phones, mobile phone base station controllers (2G/2.5G/3G), data processing units, data storage units, switching products, 3G interface boards, and message bus interfaces.

Along with manufacturing services, the company also supports original equipment manufacturers (OEMs) with fully integrated solutions comprised of collaborative design, manufacturing, engineering services, sourcing, demand and supply chain management, and after-sales services, including product repair and recycling, for the entire lifecycle of their products.

The plant is ISO 9001:2000 and ISO 14001:2004 certified and adheres to Six Sigma, SA8000 and OHSAS18001 implementation. Elcoteq Beijing employs over 1600 people. Besides Elcoteq Beijing, the Elcoteq Juarez, Mexico plant also supports OEMs in the flat panel TV and set-top box markets.

"We are delighted that we are ready to manufacture set-top boxes for our customers. We appreciate the support of Beijing's Business Development Area (BDA), China's Ministry of Commerce, the local government, and our colleagues who have helped our plant obtain this license in the short span of several weeks," said Wang Zhou, general manager of Elcoteq Beijing.