Samsung held its Printing Solutions National Dealer Meeting during the last week of March 2017 in sunny Chandler, AZ, with 254 attendees. It was the first opportunity for Samsung and HP jointly address to Samsung dealers and press laying out the roadmap as to what to expect once the regulatory approval is granted for HP’s acquisition of Samsung’s printing business later this year.
Tuan Tran, the general manager and global head of Office Printing Solution for HP Inc., addressed the future of the Samsung-HP marriage. Unlike the tragicomedy Waiting for Godot, where the protagonist never shows, the fully-consummated union between HP and Samsung is ticketed for some time in 2020, when they will unify under one brand. Even before then, in 2018, the dynamic will become one company with two brands.
The A3 printer dynamic, notes Tran, is a long term commitment forged between the end user, its dealer and the manufacturer. So perhaps it is only fitting that last September’s $1.05 billion acquisition of Samsung’s Printing Business Unit by HP takes a long range approach to not only the deal’s completion but the assimilation of the two concerns…to the benefit of the Samsung dealer network.
For now, very little changes.
Tran was one of several general session speakers who provided details to the previously-murky components of the deal, which is expected to be completed in the second half of this year. For the time being, the companies will continue to operate in a competitive environment, with both factions stressing the desire, need and willingness to provide Samsung’s dealer network with continued sales, service and support of the product line without diluting the Samsung brand offering.
Tran was blunt in sharing HP’s rationale behind the acquisition: Gobbling up a sizeable chunk of the $55 billion copier market, of which it boasts roughly 3% of the A3 space. HP hopes to utilize its “next generation of portfolios” to attract a larger share of the pie that entail a printer architecture with copier functionality. HP cornerstones such as its PageWide technology, Smart Device Services and its printer security in the A4 area to bolster the A3 offerings. The goal is to garner a double-digit share.
HP will be relying on Samsung to get it up to speed in the subtleties of the BTA marketplace, according to Tran, in handling distribution, a robust service network and 24-hour parts availability. “It really changes our role in terms of the value add that we bring,” he said. “When we go from the transactional market to the contractual market, our role is to stand by our channel partners so they can offer the best service to their customers. That’s a different role than what we did for transactional. We want to be nimble, fast and learn how to operate in this marketplace.”
Tran also emphasized that HP is not in the business of buying channel partners and developing a direct competition model with those partners.
Leading off the general session was Matt Smith, vice president, head of printing solutions at Samsung Electronics Americas and a former HP executive. A 22-year veteran of technology, Smith related a metaphor about his basketball coach, who always insisted that if a player didn’t have three or four fouls, he wasn’t trying hard enough. If he had five fouls, according to the coach, the player wasn’t learning from his mistakes.
The tale embodied the notion that Samsung is making its best efforts to do better by its dealer network and to continue adding products and services to the portfolio of offerings, even in the face of the acquisition. “We’re fast and nimble, but we adapt to change,” Smith said. “We’re asking you folks to embrace this change.”
Samsung improved its game stats during 2016, scoring a 22% increase in A3 units for a 33% boost in revenue. One of the keys in that growth was the MX7 device, which eclipsed the 40 ppm barrier. “We had faster products in the enterprise, a single vendor you can take to market and go from A4 all the way to 60 ppm. That’s really sparked our growth.”
The MX7 followed up its 2015 debut with a 72% revenue growth spike in 2016 (up 66% in units) and the MX3 continued to be a major attraction for the millennial generation, Smith added. In addition, the Smart UX platform, after a somewhat cool reception, has proved a hit for being app driven, customizable and technologically sexy.
Dr. KiHo Kim, CEO of Samsung S-Printing Solutions, spoke to many of the concerns the dealer base harbored regarding the relationship infrastructure, pointing out that the Samsung representatives will continue to provide service post-transaction, and that HP will honor all contractual obligations. Samsung will not retire from its R&D strategies and will continue to provide next-generation products and services with the growing millennial workforce in mind.
“We’re providing tools and infrastructure to support the activities of our partners like you in marketing, sales and service,” Dr. Kim added.
David Song, senior vice president and global head of strategic sales and marketing of Samsung S-Printing Solutions, provided an overview on the post “day one (deal close date)” changes that will take place, but most aspects of the deal underscored the “business as usual” mantra. He said there would be granular differences in areas such as the processing of business transactions, with training provided by HP at the proper time.
“Even after day one, hardware, devices, supplies, service offerings, sales teams, technical support services, and the technical support center will remain available to all of you,” Song remarked.
The only open question at this juncture is the availability of HP’s product portfolio for Samsung dealers in areas such as large-format devices, inkjet printers, web press and 3D printing technologies. Tran noted three tier opportunities for the dealers: some components of the portfolio will have open distribution, others will have select distribution while the third will be closed distribution.
“We have criteria in our HP Partner First program for specific distribution, because we want to manage geographic distribution and make sure we’re serving the right customer and not oversaturating a market,” Tran explained. “As part of the HP Partner First program, you will have access to the portfolio if you qualify. We have all sorts of criteria to qualify.”
Tran also admitted that many details of the final convergence in 2020 have yet to be ironed out, while others regarding the future of certain elements within the portfolio cannot be made public at this point. But he reiterated HP’s promise to support and augment the Samsung dealer base and hopes to receive feedback that will enable the union to better benefit its loyal BTA segment.
The final payoff will be a stronger product and service offering for both companies, and Samsung dealers will soon benefit from flying under the HP flag.
“We see an absolute bright future with the combination of Samsung and HP,” he says. “Our aspirations are nothing shorter than being number one in the market. We need your help to continue.”
Samsung also showcased a few new A3 and A4 products, such as MX3 color X3280, mono K3300, color C4010ND, C4062FX and mono M5360RX along with Smart UX App Center 2.0, and number of solutions. The notable was the opportunity for dealers to be able to submit and monetize on the apps developed in-house easily through its app center. The new products and solutions highlighted Samsung S-Printing Solutions’ commitment ensuring continuity of Samsung printer business as it will continue to compete with HP and other brands as one of HP’s Global Business Units for another two years under the Samsung brand after “day one.”