Speaking on the firm’s Q2 conference call, EFI chief executive Guy Gecht told analysts that the 10% year-on-year fall in second quarter Fiery revenues was due to the cyclical nature of the business.
“What drives the demand in this business is the upgrade cycle to new machines at better quality, better prices and better speed,” he explained. “We knew all along that this year – at least until Q4 – was going to be pretty slow.
“You saw yourself at Drupa there were not a lot of new production engines being displayed, which shows that people are not ready to launch. Of course, when new engines are launched, like in Q1 of last year, then you have the bounce back.
“The Fiery business is tied to other peoples’ innovation cycles; this is a cyclical business and the product cycle of the first half of next year is very good.”
Gecht added that the Fiery DFE, which is used by digital press manufacturers such as Canon, Océ, Konica Minolta, Ricoh and Xerox, had a “very strong market position” and customer loyalty, with over 80% of customers willing to recommend Fiery, according to EFI’s research.
EFI recently launched a two-track learning and certification programme for users of its Fiery digital print servers, tools and software options.
While the next major boom in digital press launches is expected in 2013, Gecht said that the first wave was expected in Q4 this year.
“We expect to get something in the December quarter from new engines but the majority of that will be next year – especially the first half of the year is very busy, Q1 and Q2, from new engines,” he said.
“All of our partners will have some refreshment next year – right now, it looks like it will be a lot busier the first half of the year; it could be that some will shift from Q1 to Q2 and some from Q2 to Q3, so it could be a little bit more even, but right now from our work perspective we’re working towards a lot more work in the first half compared to the second half of the year.”
Meanwhile, EFI is itself gearing up for a number of its own product launches, starting in late Q3.
“The industrial inkjet segment is approaching a fairly significant product introduction cycle, with new innovative products in the signage, label and tile categories,” said Gecht. “Launches are planned beginning in September and continuing throughout Q4.
“Next quarter we expect Industrial Inkjet revenue to increase roughly 25% year-on-year as we anticipate demand for these new products will help offset the softening economy.”
This article originally appeared at printweek.com
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