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What next for HP Inc/Samsung?

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What next for HP Inc/Samsung?

There’s been remarkably little follow-up news after the bombshell announcement 10 days ago that HP Inc is to acquire Samsung’s printer business – but IT-Online has learnt that a lot of behind-the-scenes work has already been accomplished, and the move should take place quickly and with as little disruption as possible for staff and partners of both organisations.
As the organisation that is being acquired, Samsung’s printer operations are likely to be the most affected; and a lot needs to happen before this division can be moved.
The first thing that will happen is the the printing business will be separated from the broader business, explains Mike van Lier, director of the enterprise business division at Samsung Electronics South Africa.
Globally, about 2 500 people who are directly responsible for the printing operations will be “stripped out” of Samsung Electronics, to work in a new, separate shelf company. This is expected to happen as quickly as 1 November this year.
These staff members will include those in research and development and engineering, as well as many of the operations and sales staff whose work is largely around the printing business.
This separate company will operate as a subsidiary of Samsung Electronics, focussing on printer development and sales, until the HP Inc transaction is concluded. This is expected to take place about November next year.
The final transaction will go through once shareholder and regulatory approvals have been gained. Since both HP Inc and Samsung Electronics are global companies, with leading market shares, this process is expected to be particularly thorough.
Importantly, the transaction between HP Inc and Samsung Electronics not only sells the printer business to HP Inc, but includes the transfer of $300-million of HP Inc shares to Samsung – so Samsung will have a stake in the merged company.
The full value of the transaction is %1,05-billion.
The merger of the two companies will create a very powerful brand in the global market, Van Lier says. And it is particularly significant in South Africa, where Samsung enjoys a much higher market share than it does in other territories. This means the merged company will be a dominant market force.
This is great news for the channel, he adds. “The initial reaction from our channel partners has been very positive. Putting the two brands together gives them an opportunity to do really well.”
Samsung has built a formidable portfolio of A3 MFPs that deliver the performance of copiers with the power, simplicity, reliability and ease-of-use of printers. Integrating the Samsung printer business’ products, including their mobile-first and cloud-first user experience, with HP’s next-generation PageWide technologies will create a portfolio of printing solutions with the industry’s best device, document and data security.
This is the largest print acquisition in HP’s history and accelerates its growth opportunities in the copier segment, strengthens its leading laser printing portfolio that has been established with Canon, and paves the way for future printing innovation. It also creates new avenues for growth and greater profitability for partners as they expand managed print services as sales models shift from transactional to contractual.
Samsung’s printer business also brings a compelling intellectual property portfolio of more than 6 500 printing patents and a world-class workforce that includes nearly 1 300 researchers and engineers with advanced expertise in laser printer technology, imaging electronics, and printer supplies and accessories to support continued innovation in print market solutions.
The acquisition will include Samsung’s printer manufacturing plants.
Meanwhile, Samsung will refocus the rest of the enterprise business unit, ensuring that it retains its focus and leadership position with the extensive product lines that remain in the operation.
Meanwhile, IDC predicts that HP’s entry into the A3 copier-based laser multi-function peripherals (MFP) market after its acquisition of Samsung Electronics’ printing is expected to bring major changes to China’s printing market in the product upgrade and business model transformation arenas.
The move by HP, which also said it plans to launch 16 new A3 copier base laser MFP products in the near future, into the A3 copier-based laser MFP market reflects its upbeat outlook of the relatively high profit margin of the market and its greater expectations of the printing solutions and printing management services market, IDC believes.
“The acquisition will allow HP to build on its own strength in printing solutions and leverage Samsung’s leading position in the smart office sector to expand its printing management service business,” says Donna Wang, research manager at IDC China, “To a certain extent, HP’s focus on these two areas will trigger major changes in China’s printing market.”
IDC believes that the acquisition of Samsung’s printing business and the launch of new A3 copier-based laser MFP will help HP improve its existing technologies, expand its product portfolios and speed up business model transformation. Meanwhile, such moves will also facilitate the product lineup upgrade and sales model transformation in China’s printing market.
IDC’s China’s Hardcopy Peripherals Market Quarterly Tracker 2016Q2 shows that A3 copier-based laser MFP only made up 6% of the overall shipment in China’s hardcopy peripherals market in the first half of 2016, while its sales revenue accounted for 34% of this market, meaning A3 digital composite machines had a substantially higher average price than desktop printers.