Change in our Industry

Steve Weedon Discover Imaging Products Ltd

Asia Imaging Fair

Los Angeles 2012

CEO

Change in our industry what does it mean to you?

Half Full or Half Empty

A discovery is said to be an accident waiting for a prepared mind!

Albert Szent Gyorgyi 1893-1986 (nobel prize winner 1937)

For those of us who are here today making a living in the Laser printer industry , you would be doing something else had it not been for this man trying to develop a high speed facsimile machine.

Gary Stalkweather

Gary Stalkweather

Factoids Mission. develop high speed facsimile machine Problem . How to get enough light on to paper and the output device to form an image. Answer use a laser.

Instead of copying an original which is what a facsimile is why not use a computer to generate the original and a printer to print it. 1967 Lasers too expensive at $3000 each Despite Xerox management disapproval he continues development of personal printer. He leaves Rochester for Palo Alto Research Center.

PARC Meet group at PARC trying to develop a personal computer agonizing over what to do for a printer. A match made in heaven 1971 after 9 months Stalkweather has his first working laser printer. Xerox use technology for high speed laser printer Xerox 9700, great success

Stalkweather prepared- Xerox Not Despite PARC, Xerox only see high speed laser opportunities. Stalkweather continues development of personal laser printer HP beats Xerox to market 1980.

Xerox planners estimate only 300 units a year sales. just slightly wrong!!

HP celebrates 30 millionth laser printer sale, Stalkweather quits and goes to Apple Computers. After 10 years with Steve Jobs he goes to Microsoft and Bill Gates.

Look to history to see the future

• Definition of insanity • Doing the same thing over and over and expecting different results. Albert Einstein 1879-1955

What they had in common Carnegie, Morgan, Rockefeller, Vanderbilt . Jobs, Gates, Zuckerberg ,Ortega, Ellison, Batista,Persson,LiKa-shing,Albrecht,Walton,Koch, Adelson, Bettencourt,Ambani,Bloomberg,Mittal,Soroa,Ferrero,Brin,Page, Bezos,Kwok,Usmanov,Alsaud,Shau Kee, Rhinehart,Fontbona,Otto,Thompson,Pliego,Gonzalez,Akhmetov Yu-Tung,Dell,Lisin,Premji,Ballmer Mordashov,Potanin,Knight,Allen,Velasco,Icahn,RausingMars,Safr a,Alekperov,Fridman,Klatten,Pinault Amoudi,Chambers,Paulson, Kuok, Sarmiento, Vekselberg, de Moraes,Abramovich, Bren, Lemann,Perelman,Blavatnik,Mikhelson, Vecchio Fredrikson

They were prepared to become THE Top USA 75 Billionaires Despite Rockefeller set back when Edison invented electric light, JD Rockefeller went on to become the wealthiest man the world has ever known with a fortune of $663 Billion (adjusted)

So what can we take from history to help us adapt and prosper to “Change” •

Lets look at our own history

We are a global aftermarket Industry

2015

• Worldwide laser cartridge demand to reach 445 million units by 2015, up 66 million from 2011.

STUFF TO MAKE YOU THINK • The most profit percentage by cartridge sold in our industry is made when a remanufacturer sells the

cartridge direct to end user. This amounts to less than 20 % of all remanufactured cartridges sold. 80% is sold through Retail , giving Retail all the volume power and they bargain hard for highest quality at lowest prices.

Retailers are the same customers the OEM targets to

sell originals. Retailers are targeted by clones makers.

who gets the share of increase • OEM , 80% 52.8 MILLION UNITS • Retail remanufactured cartridge reseller 10.5 million units.

• Remanufacturer to end user direct 2.65 million units.

• Clones ?

Factoids – HP Executive VP. Vyomesh Joshi (Imaging and Printing Group says ,” because of new generated content, social media and digital photography we have seen a boom for printing on laser and ink jet printers. We plan to sell more than 20 million

printers this year.”

– Kodak didn’t see it coming, what happened to Kodak!

Computer sales growth • 1974 just 50,000 PC’s sold to academics • 2011. 325,000,000 PC’s sold

• 2015 forecast, 517 million PC’s to be sold.

• PC---Printer---cartridge use---empty—reman--- customer---$

Will printing on paper grow or reduce?

• Putting images onto paper using laser and ink jet printers is not going away, its diversifying its use.

• End users will change what they use printers for, but we don’t care what they use them for because we want to supply the cartridges, and collect their empties.

• No new imaging technology emerging to remove need for ink cartridges of toner cartridges, just refinements, better technology and more challenges.

• IP is no issue for genuine cartridge remanufacturing. No excuse for poor quality. No excuse for losing an end user customer.

Challenges • Competing against clones

• IP understanding the real issues • The retail sector puts downward pressure on supply chain • Technical challenges

Component part manufacturers • Great technologists, making big investments for products you need are bringing down the cost of products and improving the

quality.

• Some vendors have been pushed out of the industry because no ROI.

• Far East manufacturers have made great strides in getting quality right as well as the price, run towards them not away from them.

Imaging OEM performance like Polymerized color toner at

pulverized toner prices. Its already here!!. It’s the next generation.

making progress • Good high quality component parts are here now and affordable.

• Many chip companies investing to bring aftermarket chips to the market. More now

than ever before. They see opportunity , they see a future.

Half Full or Half Empty

THE END IS NYE • NOSTRADAMUS PREDICTED END OF WORLD 21ST

December 2012 • No point worrying about it!

• Have a great last two weeks.

• But what if we wake up on 22nd as its all still here?

Thank You

Steve Weedon CEO Discover Imaging Products Limited