The headlines during the year focused on the fact that Agfa and Konica were out of the minilab business. Somewhere, deep in the copy, there may have been a mention that both were paper suppliers, as well. Agfa’s paper lines have already shut down; Konica will follow later this year.
That will leave the industry with three suppliers: Kodak, Fuji, and Mitsubishi. But wait, we may soon lose one of those papers. Mitsubishi paper is coated in this country at the Konica plant in the Carolinas. With Konica-Minolta dropping out of photo entirely, it is expected that they will close this plant by the end of the year, leaving Mitsy with only its own paper facility in Japan.
Could this be the straw that breaks Mitsy’s back? Will they drop out of the business as many suspect? I cornered Chip Dorsey, Mitsubishi’s VP of digital imaging, at his booth. His response: “We are actively selling product to current users. Beyond that no decision has been made.” The expectation is that Mitsy, long the low-price brand, will drop out of the market—at least in the U.S.
Then there were two: Kodak and Fuji. Kodak manufactures paper in Rochester, Brazil and Australia; Fuji, in South Carolina, the Netherlands and Japan.
We all know that the film business is rapidly approaching its sunset. Does that mean that silver halide paper has to go with it? At a small press breakfast hosted by Kodak, Mary Jane Hellyar, president of Kodak’s film and photofinishing systems group, made these points:
• “In the professional segment, more than 75% of the silver halide paper consumed …is used to print digital images…”
• “In the consumer segment, on a worldwide basis, the number of digital prints at retail made on silver halide paper surged from three billion in 2003 to 11 billion last year.”
She added: “Based on this growth in digital printing, we are seeing early signs that the market for silver halide paper may be stabilizing as the rate of decline is moderating.” She estimated that by Q4 of this year there will be more prints made on this paper from digital source than from negative source.
In other words, folks, while film is just passing through, silver halide paper is hanging around.
The concern of paper users, with only two major suppliers in the industry, is that of price. Paper has always been a battleground as suppliers jockeyed for position with major chains and buying groups. Whipsawing one manufacturer against another to gain a better price is an old American game. With five suppliers it can be rather effective. With two, the balance shifts away from the retailer.
My guess is that when current contracts for paper supply mature, it will be the user, not the supplier, who will stand with hat in hand. Prices are expected to creep up.
Hewlett-Packard: Two New Photosmart Systems Draw Considerable Interest
Hewlett Packard, while not a newcomer to PMA, this year generated considerable interest with its introduction of two new products, the Photosmart Express Station and the Photosmart Express Studio. So often I heard, “Did’ya see what HP has?” What HP unveiled, after months of speculation around the industry, was a free-standing kiosk not unlike many other kiosks, though it does offer some unique elements: it outputs 4x6 inkjet prints, at 5-second intervals; is loaded with 3,300 cuts sheets of paper and 100 blank CD’s and has enough ink for up to 50,000 prints—depending on the use of each of its six color cartridges.
More folks seemed intrigued by the Photosmart Studio. This is a setup that includes a consumer input station and a printer that will output inkjet prints of random sizes on two sides of a page, either 8x8 or 12x12.
Wal-Mart, which had a few of the Studio systems on test prior to PMA, was sufficiently impressed by the potential of the Photosmart Studio that it committed to 50 installations. I was told that Longs Drug and Albertsons are also putting in the HP Studio. The first known Albertsons install is in a new store being opened in Huntington Beach, CA where some 1,200 feet, large for a supermarket set-up, is being dedicated to a photo department that will also include a Photo-Me DKS 1550 minilab.