Scanner Companies Prepare for Shakeout

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July 03, 1998 (9:22 AM EDT)

By Mo Krochmal,

As a likely shakeout in the scanner market approaches, Info Peripherals is looking to add new lines and new sales channels to survive, an executive of the company said Thursday.

"There is absolute chaos in the marketplace," said Jeffrey Bottorff, vice president of marketing for the Campbell, Calif.-based computer hardware company founded in 1991.

In the past year, the standard for scanners has gone from 24-bit to 30-bit to 36-bit, while prices have tumbled.

"I have a joke going with our vice president of sales that soon scanners will be selling for $49.95 with a $50 rebate," said Bottorff.

"The bottom of the market is falling through," said Nathaniel Palmer, senior consultant with the Delphi Group, a Boston, Mass.-based consultancy. "Prices are dropping at unprecedented levels," he said.

Info Peripherals, which is in sixth place behind Umax Technologies, Hewlett-Packard, Mustek, Microteck Lab, and Plustek USA in the consumer-scanner market, is battling back by introducing products and joining in an Internet sales channel.

The company will soon announce it will make a distribution deal with Value America, a company that sells computer products over the Internet, Bottorff said. Also, the company will be introducing a thin-client terminal for Windows NT servers as well as LCD monitors.

"We are looking to get into new markets, markets that are stable," said Bottorff.

As a sales channel, the Internet means higher revenue margins for Info Peripherals, which has a 45-day inventory on hand with products that have a 120-day life cycle in a marketplace, Bottorff said. The company is not abandoning scanners, but is seeking shelter, he added.

To survive in the marketplace, Delphi's Palmer said, Info Peripherals will have to distinguish itself by providing a high-end product and by establishing its name.

"They have to create a buzz," he said.