Search
Close this search box.

HW Joint Venture a Sign of the Times

Share This Post

The recent announcement of the joint manufacturing venture between Ricoh and Toshiba could be the first of many that we will see in the hardware industry. With the MFP market taking an accelerated hit due to work-from-home initiatives that started during the pandemic, and MFP and printer placements expected to decline 3%-7% annually, something had to give. Toshiba and Ricoh have decided that increasing efficiencies by combining their manufacturing will create some leeway, freeing up resources at both organizations to focus on more profitable ventures, such as software and solutions.

On May 18, Ricoh Corporation and Toshiba TEC corporation (TTEC) announced the creation of a joint venture between the two companies whereby manufacturing from each entity will be transferred to a new joint venture. The goal of this joint venture is to gain manufacturing efficiencies for common components while expanding both companies’ addressable markets through product synergies. The joint venture will be managed by a combination of representatives from both companies and Ricoh and TTEC will individually buy their products from the joint venture while maintaining their own IP and go-to-market strategies.

Additionally, Ricoh and TTEC will maintain wholly separate distribution channels. The commencement for the JV is scheduled for Q2 2024. Ricoh and Toshiba will each maintain their current product lines through at least early 2026, with jointly developed devices scheduled to come to market in the mid-2026 timeframe. According to Larry White, President & CEO of Toshiba USA, each company will maintain their own software, which will differentiate the products.

“The goals of this joint venture are multiple,” said White during an analyst briefing. “One, we will be able to leverage efficiencies and scale in our manufacturing. Two, this will streamline our efforts to meet global environmental compliance requirements. Three, this will enable us to focus more on software and other workplace solutions. This will free up capital to invest in software and enable us to focus on more value-added software and services. Finally, this will enable us to expand our future product offerings.”

White cited solutions, which includes Capture and DM software, as one of four key areas of future growth for TABS. He said the organization is continuing to invest in and development new and exciting products in this area but was unable to comment on any specifics.

Market Impact 

This manufacturing initiative will make the new joint venture the largest MFP producer in the world overtaking Canon, Inc. This has significant implications for the remaining office equipment vendors. The ability to streamline and increase efficiencies through shared practices and scale will offer competitive advantages including improved time-to-market and greater resources for technological innovations of new products. Furthermore, with the combined volumes of both companies there is greater flexibility and product availability, thus providing fewer supply chain issues and geopolitical risks. 

Infosource Insight

Infosource believes this may be the first of many joint venture initiatives in the coming years as the economic realities of a post pandemic office equipment industry emerge. We have seen market consolidation, business splits (e.g., HP and Xerox) and vendors announcing their exit of market segments (e.g., Panasonic, OKI, etc.) as well as vendors seeking to expand their portfolio into solutions and services, which included acquisitions of channel partners (e.g., Kyocera).This integration which enables consolidation is a benefit for both companies moving forward and should provide future growth opportunities for them in the print and solutions business.

For more complete analysis of this joint venture please reach out to one of the authors of this report: Barbara Richards, senior analyst for HW, the Americas, [email protected]; Ralph Gammon, senior analyst, software, [email protected].

Subscribe To Our Newsletter

Get updates and learn from the best

Latest Blog Articles

PRINT INDUSTRY SUSTAINABILITY AND AI

By Petr Kramerius, Regional Manager at Infosource November 2024, According to many experts, AI has the potential to drive sustainable practices within the print industry by optimising energy efficiency, reducing...

Read More
;