issue12en1103

Recycling Times Magazine

RecyclingTimes The magazine by the industry, for the industry.

Publisher & Managing Director Tony Lee tony@therecycler.com.cn

Directors

David Gibbons david.gibbons@therecycler.com.cn Sabrina Lo sabrina@therecycler.com.cn

Editorial Editors

Johanna Breen Cherry Xu translator@therecycler.com.cn Jessica Yin magazine@therecycler.com.cn Sophia Jiang editor@therecycler.com.cn

Designer

Adam Lin design@therecycler.com.cn

Sales Sales Manager

Anna Leung anna@therecycler.com.cn

Account Manager

Kevin Zhu kevin@therecycler.com.cn

Sales Executives

Joy He mktas@therecycler.com.cn Sally He sales@therecycler.com.cn Susi Guo Sales02@therecycler.com.cn

Operations and Marketing Operations Manager Charles Lee charles@therecycler.com.cn

Operations Assistant

William Feng operation@therecycler.com.cn

Marketing Manager

Morrow Miao morrow@therecycler.com.cn

Accounting

Feng Li account@therecycler.com.cn

Published by

Recycling Times Media Corporation

Address

editorial editorial

www.recyclingtimes.com.cn

I

took a look at the calendar today and I was shocked to see so many industry trade shows this year, springing up like mushrooms: For January, Remax@ Paperworld Europe was on; February, ReIndia; March, Remax@Paperworld Middle East and ITEX show in Washington D.C.; April, two shows in China: ReChina in Shanghai and Asia Imaging Fair in Beijing. May, Remanexpo USA and RechargRussia; June, Reciclamais in Brazil and CIFEX Australia Expo and Conference; July, World Expo in Las Vegas. Finally you can take some rest in August and September. Then in October, we have the Zhuhai show, the largest show in terms of scale and ReChina in November.

There are 13 of them! Four in China and three in the US make up 54% of these. Germany, Russia, India, Brazil, Australia and United Arab Emirates each host one fair. I cannot help but asking: how many shows does the industry really need? Can we actually get what we expected out of the series of fairs?

Take a look around, the OEMs have used mass media to mislead the customers and scare them away from aftermarket printer supplies. Southern Television Guangdong (TVS) reported that fake toner cartridge cause cancer. They categorized toner cartridges into two types: OEM cartridges and fake cartridges, misleading the consumers and influencing their buying decisions with regard to aftermarket products.

HP ad testing lab QualityLogic study suggested that original OEM cartridges outperformed non-OEM cartridges in all areas of the study. The result is no surprise to those following the supplies industry. HP has commissioned similar studies in the past, with similar results. So did other OEMs. As spokespeople for the industry, we must face up to the vicious statements by the OEMs and bring the industry together. It’s time we passed on information about the development of aftermarket printer supplies industry to the consumers to ensure a healthy growth of our industry.

5F Pacific Insurance Building, Jiuzhou Ave, Zhuhai, China

RecyclingTimes

Tel：+86 (0)756 3220716 Fax：+86 (0)756 3220717 Email：info@therecycler.com.cn Website：www.recyclingtimes.com.cn

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March 2011 | www.recyclingtimes.com.cn

Tony Lee Publisher & Managing Director

All rights reserved. © 2011 by Recycling Times Media Corporation. The contents are not be to copied or republished without official written consent. The editorial content does not represent official positions of Recycling Times Media Corporation.

Recycling Times Magazine

contents contents

Recycling Times presents CIFEX Gold Coast Recycling Times will host the CIFEX Expo and Conference 2011 in Holiday Inn Surfers Paradise located on Australia’s Gold Coast on June 12, 2011, which will provide a unique opportunity to network and do business with the Australian and New Zealand local remanufacturers and distributors, as well as worldwide suppliers.

www.recyclingtimes.com.cn

Just a Minute with David Gibbons

4

Where there's a will ——Jackie shows the way to success for the ordinary

Time for the annual check-up?

Jackie, now 36, climbed the corporate ladder in Ninestar Image Co., Ltd, beginning as a sales assistant. To honor the International Women's Day, Recycling Times features Jackie Zhang, a mother and a businesswoman in this issue.

Industry Updates

7

Recycling Times presents CIFEX Gold Coast

8

Guangdong fortifies position as main hub for printer consumables

9 10

China’s new patent law – influence and interpretation

Lexmark settles patent suit with 10 companies

The interpretation of the Supreme Court on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Dispute Cases came into force on Jan 1, 2010. Further, the Implementation Regulations were issued on Jan 9, 2010.

Lodsys sues Brother, Canon, HP, Samsung, and others Town Sky goes bankrupt

Features

Zhuhai Gree and Green Project may settle with Epson KolionTech launches new official website

19

Product Release

12

Orink introduces compatible HP 920XL, 940XL series ink cartridges Color Imaging expands Konica Minolta offerings

Profiles

25

13

Faroudja offers Xerox 4500 drum and Samsung SCX 6345 chips

Where there's a will —Jackie shows the way to success for the ordinary

Sales & Management

MSE launches cartridges for HP P1102 and P1606 FG offers new PCRs

Reman: the enemy of the OEMs?

29 30

Are you attracting price shoppers?

For best results, forget the bonus

Delacamp launches chemical toner for use in TN230

OEM News

14

Austin salesman sues HP for $4 million

33

Canon India creates unified office imaging solution division HP reports first quarter 2011 results

38 40

Epson introduces Stylus Photo R3000 Xerox announces new production inkjet system Samsung launches new printer lines

OEM last quarter performance: some smile, some shy

Legal Issues

Ricoh India targets five-fold revenue boost by 2014 Epson India projects 1,000 crores by 2015

15 16 17

Market Data

The winter of patent war is sweeping the Europe China’s new patent law–influence and interpretation (part one)

Tech Zone

42

Remanufacturing the HP LaserJet P1606 Series toner cartridge CE278A www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

Just a Minute with David Gibbons

Time for the annual check-up?

Another new year has arrived. For many cartridge retailers, incomes have dropped by as much as 35% in the past year. So maybe it is a good time to assess the health of your business.

I am going to ask you some questions. Keep your answers honest and accurate. Then take a look where your deficiencies lie.

1. How can you improve your skills to better manage your business?

2. Does your business suffer from a high staff turnover rate? Why? (be honest) 3. Do your employees know what is expected of them? (Really?)

4. What training could you offer to your senior managers to complement their skills? ( When did you last provide training?)

5. What parts of your customer base are most and least profitable? (How often do you look at your database?)

6. Have you studied additional complementary products you can sell to your existing customers?

7. Have you had another look at who your competition is lately? (The real competition—not just the other remanufacturer in the next town) What are their strengths?

8. Which of your products and services are the most and least profitable? Which ones are preferred by your customers?

9. Do you get out and meet/talk with your customers to find out what they want?

10. What are your suppliers' strengths and weaknesses?

11. Do you do annual financial forecasting?

Are your forecasts reasonable and accurate?

12. Are you up to date with payments and receivables? (or have you become soft?)

13. Do you have the best equipment for your needs?

14. Can your location handle growth to your business?

Your doctor gives you an honest appraisal at least once a year to check that all is going well. So why do you think your business doesn’t need a similar check?

Keep disease at bay, be honest with your responses, and then do something about them. You will find you will change the fortune of your business.

David Gibbons is Director of Recycling Times. He has been a school principal, marketer, businessman, remanufacturer and Executive Director of the Australasian Cartridge Remanufacturers Association until 2005. He is currently the director of communication of a large South Pacific organization.

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Recycling Times Magazine

Industry Updates

Recycling Times presents CIFEX Gold Coast

R

ecycling Times announces that it will host CIFEX conference and expo in Gold Coast, Australia on June 12, 2011.

This industry-oriented event provides a unique opportunity to network and do business with the Australian and New Zealand local remanufacturers and distributors, as well as worldwide suppliers.

Australia is known to enjoy a free-market economy with high GDP per capita and low rate of poverty. Ranked third in the Index of Economic Freedom (2010), Australia is the world's thirteenth largest economy and has the eleventh highest per capita GDP; higher than that of the United Kingdom, Germany, France, Canada and Japan, and on par with that of the United States.

Australian’s cartridge-remanufacturing industry started in the late 1980s. And the cartridge remanufacturing industry flourishes since then.

The world’s largest cartridge refilling franchise Cartridge World was originated in Australia, currently with over 220 stores nationwide.

As the economy and market environment changes, especially over the last 2-3 years, the printer consumables industry dynamics in the region has also changed. Industry players are eager to have a chance to get together, exchange

ideas, lear n the latest information from a worldwide perspective, and find new business opportunities.

Therefore, Recycling T i m e s invites international ▲ Ed O Connor presenters to share their wisdom on the hottest topics in the industry. Heading up the international presenters are wellknown patent lawyer Ed O’Connor, industry ▲ Charles Brewer analyst Charles Brewer, Managing Director of Clover Technologies Group Australia, Peter Costa, and Publisher of Recycling Times Magazine, Tony Lee. The topics will be discussed include IP issues in the printer cartridge industry, international trends in inkjet, toner, and paper, MPS, eco-friendly business models and so on. More speakers will be confirmed and announced soon.

Besides a one-day conference, there will be an exhibition at the event. There will be 20 highquality exhibitors from local and other parts of the world showcasing the latest products and technology, providing great opportunities for distribution.

“CIFEX has gained great success in China over the last two years. The event provides great opportunities for the industry to get together and to learn, network and showcase. CIFEX also hopes to add incentive to the local industry develop wherever it goes. CIFEX Gold Coast has gained a lot of support from the local industry, and it is much anticipated. We believe with our successful experience with past CIFEX events and Zhuhai trade show, and our sufficient preparation, CIFEX Australia will bring great benefits to the local industry.” said Tony Lee, Managing Director of Recycling Times, the organizer of CIFEX. CIFEX Australia will be held on June 12 in Gold Coast, one of the most favorite tourist destinations famous for its sunshine and beautiful beaches.

The venue, Holiday Inn Surfers Paradise is located on the Gold Coast in the heart of Surfers Paradise surrounded by shops, restaurants, cafes, nightlife, attractions and only 100 meters to beaches.

Lexmark settles patent suit with 10 companies

O

n February 8, 2011, Lexmark announced that it had reached settlements in connection with the patent litigation pending in the U.S. Inter national Trade Commission (ITC) and the U.S. District Court for the Southern District of Ohio with the following companies: • Alpha Image Tech • E-Toner Mart, Inc. • Nano Pacific Corporation • Ninestar Image Co. Ltd. • Ninestar Image International Ltd. • Ninestar Technology Company, Ltd.

• Print-Rite Holdings Ltd. • Seine Image International Co. Ltd. • Union Technology International (M.C.O.) Co. Ltd. • Ziprint Image Corporation Although Lexmark did not list the company in its press release, we have also learned that Lexmark and Nectron have settled in the district court case.

Among the terms of the settlements, the parties have agreed to the entry of a final judgment and permanent injunction in the District Court litigation. In addition, the parties will not oppose Lexmark’s efforts to secure an order from the ITC banning future

importation of infringing cartridges. While the settling companies did not admit to any wrongdoing, they have confirmed their ongoing commitment to respect intellectual property rights by resolving the litigation amicably. Print-Rite Holdings Ltd. has also agreed to be bound by the settlement even though it claims that it does not directly conduct manufacturing, importation, or sales activities. Related claims asserted by Lexmark against other parties to the litigation are unaffected by its agreements with the Settling Parties. The remaining terms of the settlement are confidential. www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

Industry Updates

Guangdong fortifies position as main hub for printer consumables

L

everaging a comprehensive supply chain for electronic devices, Guangdong province remains the leading sourcing hub for printer consumables in mainland China.

Home to three of the country’s four economic zones, it gathers various raw material providers and has a sales network for finished products.

Several known distributors of printer consumable parts and components have set up logistics and distribution centers there, including Static Control Components. Local manufacturers promoting their own brands such as Print-Rite, Zhuhai Ninestar and Zhuhai Gree Magneto-Electric Co. Ltd are also based in the area.

Guangdong currently plays host to over 300 suppliers in this field, representing more than 70% of the country’s total. To maintain this position, it is directing efforts toward improving the major sourcing center Zhuhai, which has approximately 150 manufacturers and another 120 enterprises

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providing support services. The city’s denizens hold over 1,000 patents, according to the Zhuhai Printer Consumable Industry Association or ZPCIA. The provincial government has set up a production and research base in Zhuhai. The latter cooperates with the State Key Laboratory of Fine Chemicals in developing weather-resistant dye-based ink, for which four patents have been applied. In addition, it works with Dalian University of Technology to create chemical carbon and special pigment ink.

The city likewise maintains the International Patent Database – ZPCIA – which was approved by the China Computer Industry Association, and the State and Provincial Intellectual Property Offices in 2008. Two years after, the National Quality Inspection Center of Consumable Materials also passed an acceptance check. It is the only statelevel body for such products in the country. One planned growth phase consists of a laboratory

equipped with test devices valued at $2.2 million.

The other is a 16,000 sqm inspection base in Nanping Technology Park with an allocation of about $7.4 million.

Constr uction is still in progress, but manufacturers are already optimistic this will reduce verification costs dramatically. At present, suppliers send their products overseas for the checks, and the fee for each unit is at least $30,000.

When the center starts operating, they project charges will drop 15 to 20 times.

Recycling Times Magazine

Industry Updates

Lodsys sues Brother, Canon, HP, Samsung, and others

L

odsys LLC, a Marshall, Texas-based company, filed a patentinfringement lawsuit in the United States District Court for the Eastern District of Texas. The complaint names include Brother International, Canon U.S.A., Hewlett-Packard, Hulu, Lenovo, Lexmark International, Motorola Mobility, Novell, Samsung Electronics and Trend Micro.

Some of the products that Lodsys claims infringe its intellectual property include printers and MFPs that use software that shares with the vendor information about supplies usage and/or helps users order supplies online.

Some of the allegedly infringing MFPs use software that helps users to easily access various MFP functions or so-called Universal Print Drivers.

Altogether, Lodsys claims that the defendants infringe three of its patents. The first of these patents is of the most interest to those following the printer and supplies industries. Lodsys accuses Brother, Canon, HP, Lenovo, Lexmark, Motorola, Novell, Samsung, and Trend Micro of infringing U.S. patent 7,620,565, “A Customer-Based Design Module.”

It seems that this patented technology uses a combination of computer hardware, software, and communications technologies to construct a communication network that interacts with a user, gathers information from the user, communicates with the product’s vendor, and receives new pre-programmed interactions from the vendor for future interactions with the user.

Lodsys also alleges that Brother, Canon, HP, Hulu, Lenovo, Lexmark, Motorola, Novell, Samsung, and Trend Micro have infringed U.S. patent 7,222,078, “Methods and Systems for Gathering Information from Units of a Commodity Across a Network.” The patent covers a system for receiving at a central location information generated from two-way local interactions between users and a user interface.

A third and final patent that Lodsys claims has only been infringed by Samsung and Trend Micro is U.S. patent 5,999,908, “Customer-Based Product Design Module.” The plaintiff says that the infringing products are website surveys.

Lodsys is requesting a permanent injunction to prevent further sale of infringing products and to be awarded damages, treble damages, attorney’s fees and court costs.

www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

Industry Updates

Town Sky goes bankrupt

R

ecently, Ninestar appealed against an $11.1 million fine ordered by the US International Trade Commission (ITC) against both Ninestar and its US distributor Town Sky, and Ninestar’s distributor has filed for bankruptcy. This leaves Nano Pacific as the Ninestar group of companies’ main distributor in the United States, according to Actionable Intelligence.

San Francisco-based Town Sky filed for Chapter 7 bankruptcy protection in the United States

Bankruptcy Court for the Northern District of California over a year ago, on February 12, 2010, saying it had ceased operations and had no income or expenditures. Unlike Chapter 11 bankruptcy, which can allow a firm to reorganize its debt and reemerge and resume operations, under Chapter 7, all assets are liquidated to pay off creditors.

It appears that litigation with Epson and the general exclusion order that Epson was granted barring importation of compatible Epson inkjet cartridges and tanks hit Town Sky hard.

According to Town Sky ’s petition for bankruptcy, the company had just $26,640.89 in assets and owed $207,867.03 to its creditors.

The firm’s assets are primarily in the form of a security deposit on the space it formerly leased plus a little over $7,000 in accounts receivable.

Town Sky’s creditors include its phone company, its garbage company, and one employee, but its biggest unsecured creditor, to the tune of $202,000, appears to be the company that took over its lease.

Zhuhai Gree and Green Project may settle with Epson

E

pson’s inkjet patent infringement lawsuit against various non-OEM cartridge makers before the U.S. District Court for the District of Oregon, Portland Division, is scheduled for trial this August.

At the end of last October, Judge Anna J. Brown issued an order finding Zhuhai Gree MagnetoElectric Co., Ltd. in default. Zhuhai Gree had relieved its lawyers of representing the company

in the lawsuit, and the lawyers asked to be removed as the counsel of record in August. The court issued an order granting this motion and notifying Zhuhai Gree that its new counsel must appear before the court by October 8, 2010.

Zhuhai Gree was not compliant with this order, so Judge Brown issued an order of default against the company.

In another district court document that Epson

has reached a “tentative settlement” with Green Project, Inc., and its president, Joseph Wu. Green Project sells remanufactured Epson inkjet cartridges, not compatibles, and was added to Epson’s complaint after it was originally filed.

Green Project also launched a countersuit against Epson, alleging unfair competition, trespassing on its property, and misappropriation of trade secrets.

KolionTech launches new official website

K

olionTech has successfully released a n e w o f f i c i a l w e b s i t e w w w. koliontech.com to welcome in the New Year. The new website mainly focuses on

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information about its factor and products and comprehensive customer service.

In order to adapt to its customer’s internet habits, the layout and design are more rational and user-friendly. On the home page, you can browse information easily, such as a search for districts, new and hot products, the news center and so on. From this more convenient, customized and visual inter net service, clients could easily find their satisfying answer to whatever they need.

“A s w e o f f e r m o r e t h a n 6 0 0 models of toner cartridge, the

new website provides a much more effective reference, giving a detailed introduction, exact parameters and clear product photos for the customers. Clients can search any thing they want effectively. Furthermore, the layout design, functional search, and information collection and marketing activities offer allround customer service,” said Irene Zhou, the sales manager of KolionTech.

Contact KolionTech at info@koliontech.com for more information or any inquiries.

• Contact KolionTech Email: info@koliontech.com Website: www.koliontech.com

Recycling Times Magazine

Product Release

Orink introduces compatible HP 920XL, 940XL series ink cartridges

MSE launches cartridges for HP P1102 and P1606

S

hanghai Orink Infotech Internatianal Co., Ltd announced the launch of a new compatible HP 920XL, 940XL series of ink cartridges. The product information is as below: For further information, please email sales@orink.com, or visit www. orink.com.

For use with Printers

Color

OEM NO. content

for HP Photosmart B8550/B8553/ B8558/C6380/ C6383/C5324/ CH920BK/XL C5383/C6324/ (no chip) C5390/C5393/ C5388/C5370/ C5373/D5468/ D5463

Black

920BK, CD975AA

CH940BK/XL (no chip)

Black

Model No.

CH940C/XL for HP Officejet Cyan (no chip) Pro 8000(CB092A)/ 8000 wireless/8500 CH940M/XL All-in-One printers Magenta (no chip) (CB862A) CH940Y/XL Yellow (no chip)

53ml

940BK, C4902AN

69ml

940C, C4903AN

28ml

940M, C4904AN

28ml

940Y, C4905AN

28ml

Color Imaging expands Konica Minolta offerings

C

olor Imaging, Inc. introduced 100% new compatible exclusive color toner cartridges for the Konica Minolta bizhub C220/C280 and C360. Color Imaging continues to expand its product offerings that provide solutions to the cost per copy pressures that exist in the business color environment.

This toner has been extensively tested to ensure OEM compatibility and comparable print quality, yield, component wear and adhesion.

Color Imaging is experienced in working with conventional, chemical and mechanically rounded toners, which are all part of its extensive line of products. The company continues to make the investments necessary to meet the requirements of changing technology.

Contact Color Imaging on (+1) 800-783-1090 or visit www. colorimaging.com.

M

icro Solutions Enterprises (MSE) has announced the release of cartridges for the very popular P1102 and P1606 printers.

These segment 1 entry level printers are replacing the equally popular P1005/1505 printer families and MSE's cartridges also are compatible in the segment 1 MFP versions of these devices.

These printers are already available widely in retail and will definitely be well placed in the SOHO marketplace.

For more information about MSE, please visit www.mse.com.

FG offers new PCRs

F

uture Graphics (FG) has launched new PCRs for HP P1215, CP1515, CP1518, CP2025, CM1312 and CM2320 remanufactured toner cartridges. Information regarding the new products is as shown in figure 1. The PCRs passed the L/L and H/H test, and the results from these tests are shown in figure 2.

In addition, FG has introduced other products for use in the HP CP 1518 series printers, such as toner, chips, other components and tools.

For more information, please email enquiry@fgimaging.com.cn, or visit www.fgimaging.com.

FG Product Code

Description

Qty

For use in

HP1518PCR

Compatible PCR

10

HP CP1215/CP1515/ CP1518/CP2025/ CM1312/CM2320

â–˛ Figure 1

Test data FGIC OEM FGIC OEM FGIC OEM FGIC OEM

Toner

Average Average Average density Page Yield Gray value

OPC

HP2025 HP2025 CHEMK90 MKIPNPE OEM

OEM

HP2025 HP2025 CHEMC70 MKIPNPE OEM

OEM

HP2025 HP2025 CHEMM70 MKIPNPE OEM

OEM

HP2025C HP2025 HEMY70 MKIPNPE OEM

OEM

1.45

3,968

0.003

1.46

3,987

0.004

1.34

2,939

0.003

1.32

2,892

0.004

1.3

3,455

0.003

1.33

3,495

0.004

0.99

3,407

0.003

0.82

3,373

0.004

â–˛ Figure 2

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Recycling Times Magazine

Product Release

Faroudja offers Xerox 4500 drum and Samsung SCX 6345 chips

F

aroudja Toner has released a new drum for the Xerox Phaser 4500, it was announced.

“The Xerox Phaser 4500 OEM drum unit retails at around $200 and so our drum presents a good opportunity for rechargers,” explained marketing director Tim Farrell. The Faroudja 4500 drum can be purchased individually or in large quantities. “It comes with gears and silencer, and the quality is outstanding.

We feel this is the best 4500 drum on the market today” added Farrell.

Faroudja Toner also offers drums for many other black and color cartridges including Brother, Dell, HP, Minolta QMS and Okidata.

Faroudja Toner has also introduced smartchips for the Samsung SCX 6345.

“We always try to provide the complete solution,” explained Farrell. “We supply the chips for the Samsung SCX 6345, but also the toner, drum and drum chip. This way, customers don’t have to go to three different places.”

Faroudja supplies smartchips for a range of other Samsung SCX cartridges, including those for the SCX • Contact Faroudja Toner 4200, 4720, 6220, and 6230. “If Phone: +1 650-593-3862 you’re looking for Samsung Fax: +1 650-593-3817 SCX chips, call Faroudja,” Web: www.faroudjatoner.com Farrell said.

Delacamp launches chemical toner for use in TN230

D

elacamp is proud to announce the launch of CPT chemical toner and plastic parts for use with the TN 230 (HL 3040) remanufactured cartridges.

“The TN230 chemical toner is the latest addition of our growing CPT high quality chemical color toner range. It is important that the aftermarket applies the highest standards in color cartridge remanufacturing. Therefore, we follow one basic strategy: If the OEM designed its cartridges for chemical toner then the aftermarket should use chemical toner in the remanufacturing of those cartridges as well! Cartridges designed for use with chemical toner have tighter tolerances than those designed around conventional toners.

A Formula 1 racing car would not perform very well with regular unleaded gasoline because the engine was designed for use with premium high octane gasoline. The same principle applies to color cartridges. ” says Volker Kappius, COO of Delacamp.

For more Information on Delacamp visit www.delacamp.com.

www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

OEM News

Austin salesman sues HP for $4 million

P

laintiff Lawrence Howe, a n A u s t i n ( Te x a s , US) man promoted two years ago to regional sales manager by HP is suing HP for fraud, alleging it owes him $4 million in sales commissions that it inexplicably stopped paying, Austin Business Journal reports.

Howe, who originally filed his complaint about a year ago in the Western District of Texas federal court, amended it this month in response to HP’s claim that it never had a contract with Howe guaranteeing payment.

HP has now responded to the claim and argues that “sales letters” it issues annually detailing compensation are not contracts. HP said it did not have a contract with Howe to guarantee his payment.

Ricoh India targets five-fold revenue boost by 2014

R

icoh India expects to grow its sales five-fold to 15 billion rupees by March 2014. It believes it can achieve this by strengthening its existing portfolio and through acquisitions and alliances.

The firm is targeting 5 billion rupees of revenue through inorganic growth and expects to acquire a local IT services company by April or May this year, Managing Director N Maitra said.

Ricoh India is looking to expand in the tier two and three segments and has earmarked about 1 billion rupees in capex over the next three years to expand its existing business portfolio. The capex does not include investments on acquisitions and strategic alliances.

"It is very difficult to benchmark an investment for the acquisition.

What we are looking for is what kind of synergies it is going to bring between the acquired company and Ricoh. And also how it is going to expand our customer base," Maitra said.

Ricoh India expects revenue of about 3.2 billion rupees for the fiscal year ending March. It currently contributes a fraction of the group's total sales of almost $22 billion. Ricoh Co. owns a 73.6 % stake in the Indian firm.

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Epson India projects 1,000 crores by 2015

E

pson celebrated 29 years of presence in India and it announced that it is likely to achieve a turnover of Rs. 500 crore in 2011. It is expecting a 25% growth from last year moving from 400 crores to 500 crores. Epson expects to achieve a target of maximum 1,000 crores as its turnover by 2015.

Epson has come a long way since it was setup in 1990 and produced its first product which was the dot matrix printers followed by point of sale printers in 1995.

It is reported that Epson will be focusing on home and office, education, health, government, SME, retail and photography to obtain their target of Rs.1, 000 crores.

Epson wants to extend its present lineage of products and also look for some new opportunities as well, while creating customized products for Indian consumers in order to attain its projected target.

Epson enjoys a good Indian market share for dot matrix printers of approximately 53%, inkjet printers and all-in-ones 14%, point of sale printers 52% and projectors 14%. All these categories have Epson leading or following a close second.

Canon India creates unified office imaging solution division

C

anon India announced the merger of its enterprise solutions division for large enterprises and channel network for the SME segment. The company recently appointed K Bhashkar as the Director of Office imaging Solution Division (OIS). This B2B business has been one of the major contributors in Canon’s overall business contributing more than 25% to the company’s revenues in 2010.

Alok Bharadwaj, Senior Vice President Canon India said, "With sustained 9% GDP growth, we should begin to witness higher level of entrepreneurial depth. India Inc. prints and copies over 60 billion documents a year. This costs Rs. 10,000 crore in a year. Canon has been handling this business through two separate teams – the enterprise solutions division for large enterprises and the channel network for SME segment. As both these businesses represent two ends of the same continuum, we plan to merge these businesses under one division called the office imaging solutions division. We expect this division to grow revenues by 20% to touch Rs. 350 crore in 2011. ”

Recycling Times Magazine

OEM News

HP reports first quarter 2011 results

H

P has announced financial results for its first fiscal quarter ended January 31, 2011. Net revenue of $32.3 billion was up 4% from the prior-year period both as reported and in constant currency.

“I’m pleased with our EPS and margin expansion during the quarter. Going forward, we have the opportunity to further capitalize on our customers’ demands for higher value-added solutions,” said Léo Apotheker, HP president and chief executive officer.

“HP’s financial strength and discipline helped generate $3.1 billion in cash flow from operations, up 28% year-over-year,” said Cathie Lesjak, HP executive vice president and chief financial officer.

HP saw balanced growth in the first quarter across all regions in local currency, with accelerated growth in BRIC countries (Brazil, Russia, India and China).

First quarter revenue was up 6% in the Americas to $14.4 billion. Revenue was flat in Europe, the Middle East and Africa and up 7% in Asia Pacific to $12.1 billion and $5.8 billion, respectively. When adjusted for the effects of currency, revenue was up 5% in the Americas, up 4% in Europe, the Middle East and Africa and up 2% in Asia Pacific.

Revenue from outside of the United States in the first quarter accounted for 65% of total HP revenue, with revenue in the BRIC countries increasing 11% while accounting for 11% of total HP revenue.

The Imaging and Printing Group (IPG) revenue grew 7% year over year with a 17% operating margin. IPG delivered strong performance across the business with share gains in all printing categories and 33% year-over-year growth in commercial printer hardware units. IPG continued to drive innovation and momentum with the new ePrint platform, graphic arts and other commercial print solutions.

Services revenue declined 2% year-over-year with a 16% operating margin. Enterprise Servers, Storage and Networking (ESSN) revenue grew 22% year-over-year with a 14.7% operating margin. HP software revenue grew 5% year over year with a 17.6% operating margin. Financial Services revenue grew 15% year over year with a 9.6% operating margin.

For the second quarter of fiscal 2011, HP estimates revenue of approximately $31.4 billion to $31.6 billion. HP expects full year fiscal 2011 revenue in the range $130 billion to $131.5 billion.

www.recyclingtimes.com.cn | March 2011

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OEM News

Epson introduces Stylus Photo R3000

O

KI Data Americas announced it has evolved its Total Managed Print (TMP) program to better enable channel partners the ability to reduce the costs associated with printing for customers, while generating their own predictable revenue streams. The managed print services (MPS) platform gives channel partners a competitive edge with its flexible modular offering that can be leveraged to create and support an entire MPS business model or be utilized as a standalone offering.

OKI Printing Solutions provides a full suite of customizable service offerings that can be used by any size partner to develop or enhance their MPS business model.

MPS industr y expert Tim Brien joined OKI Data Americas in 2010 as Director of MPS Sales, to evolve the company's Total Managed Print program with the goal to

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increase its benefits to the channel.

“The goal of the Total Managed Print program is to enable a company ’s MPS program on all levels, while proactively allowing our channel partners to grow their businesses through incremental sales opportunities”, said Brien. The program’s modular design lets partners supply any and all parts of a managed print program that a company could require, from a complete background infrastructure to a self-hosted program.

To t a l M a n a g e d P r i n t i n c l u d e s nine customized options that can transfor m a customer's business processes and remove the burden of print ownership by managing the fleet from all steps, including: analysis, proposal, remote monitoring, service

and supplies fulfillment, and billing; as well as MPS Ready hardware and analytics to secure future growth opportunities for the channel.

Recycling Times Magazine

OEM News

Xerox announces new production inkjet system

L

everaging its proprietary solid ink technology, Xerox Corporation is introducing the world's first highspeed waterless inkjet system to enable vivid image quality on low-cost paper for printers looking to produce high-volume, high-value jobs.

Driving the inkjet device are 56 durable piezo-electric, drop-on-demand print heads with more than 49,000 nozzles jetting nearly two billion ink drops per second. Each drop hits the paper with precise pixel placement as the printer produces more than 2,000 color images per minute. This technology is designed to produce high impact color on low cost papers with close-loop controls to deliver exceptional reliability and performance needed in production printing environments.

Building off of its proprietary solid ink technology, Xerox has developed a patented, granulated, resin-based ink formulation to serve the high-speed production market. The

key benefit is the elimination of water so that vibrant, consistent color can be printed on low cost, offset paper that comes out flat with no ink soaking through.

Pages can be produced quickly and reliably, saving money in labor and waste – and because jobs are printed on demand, there's no need for warehousing pre-printed materials. In addition, the formulation of the ink enables document de-inking, which can be difficult to achieve with other inks.

Xerox's Production Inkjet System can

produce nearly 2,200 pages or 500 feet per minute - driving the most lucrative jobs in the $100 billion global digital print market, such as personalized direct marketing, transpromo and publishing applications.

The product was developed using more than 2,000 patents leading to a robust print head design that precisely controls every dot; an intelligent scan bar that checks billions of ink droplets per second so they appear exactly where they should and production inks that don't soak through paper.

Samsung launches new printer lines

S

amsung is offering a new printing solution with two new lines of networked duplex printers. The color laser multifunction SCX-4835FR, SCX5639FR, and wireless SCX-5739FW printer series feature increased security for sensitive documents, while the monochrome, single function ML-3312ND, ML-3712ND, and ML3712DW models offer faster output and more economical use.

The SCX-4835FR, SCX-5639FR, and wireless SCX-5739FW multifunction printers feature the company’s secure pull printing technology. This gives users the option to print to any device on their network and ensure that only the specified user can actually collect the document.

The SCX-4835FR, SCX-5639FR, and SCX-

5739FW also feature a reversal automatic document feeder for faster copying and scanning, and support up to 50 pounds (approximately 22.7 kg) of a variety of paper types so one machine can handle all of a user’s printing needs.

In addition, Samsung has enhanced ease of use in printing with the new ML-3712ND and ML-3712DW printers. These models offer Samsung’s new, proprietary anti-jam roller technology, which helps users deal with dreaded printer paper jams.

Most of the printers in Samsung’s new series include a 600MHz dual core processor to boost print speed. The ML-3712ND, ML3712DW, SCX-5639FR, and SCX-5739FW print at 37ppm, while the SCX-4835FR and ML3312ND print at 33ppm.

The ML-3712ND, ML-3712DW, SCX-5639FR, and SCX-5739FW also use an extra high yield toner, which lowers the cost per page. The ML3312ND and SCX-4835FR toner cartridges yield up to 2,000 and 5,000 pages, respectively.

Both of Samsung’s new printer lines feature an Eco-Mode, giving users the option to adjust settings to lower energy use and paper or toner consumption.

The ML-3312ND, ML-3712ND, ML-3712DW also have lower noise output (52 decibels) for a quieter, less stressful office environment.

The ML-3312ND, ML-3712ND, SCX-4835FR, and SCX-5639FR will be available in February for $199, $249, $449, and $549, respectively.

The ML-3712DW, and SCX-5739FW will be available in March for $299 and $699 respectively. www.recyclingtimes.com.cn | March 2011

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Features

Reman: the enemy of the OEMs? After so many years of development, printing technolog y has grown to a relatively mature stage, with few ground-breaking technologies coming out in recent years. However, as the customer experience is getting more and more attention, printer vendors are also going toward people-oriented technolog y. Mobile printing (including cloud printing, apps and AirPrint) is catching on with the promotion of convenience. Handy features such as onetouch, smart install are obviously highly appreciated by people who don’t want to handle complicated drives or even simple editing of photos and other documents. Green credentials are another important feature for the printer manufacturers. The operation of printers is likely to become simpler and easier and will definitely be the trend driving R&D efforts.

1. Recycle: OEMs “choice” Since the 1980s, the OEMs have been starting to collect empties and have proclaimed themselves as being clean. Obviously, collecting and recycling the cartridges has become a strong marketing tool. Take HP’s Planet Partners, the program is claimed to “ensure all original HP print cartridges collected are recycled responsibly in over 47 countries”, with the recycling of more than 250 million print cartridges worldwide. HP is expanding its North American cartridge recycling facility to over 7,500 square meters to improve its efficiency and productivity.

Launched during the 1990s, Canon’s Clean Earth Campaign includes the collection and recycling of used toner cartridges from its consumer base. 2010 marked the twentieth anniversary of Canon’s toner collection and by the end of June 2009 the company had reduced the use of new resources by approximately 140,000 metric tons and prevented 370,000 metric tons of CO2 emissions. The toner cartridge collection efforts that began in the United States, Germany, and Japan have since been expanded to 24 countries around the world, “which account for the bulk of Canon's sales”, claims Canon.

Through the Xerox Green World Alliance collection/reuse/ recycling program for spent imaging supplies, customers “return more than 2.5 million cartridges and toner containers annually.

Over the last 20 years, our supplies recycling programs have kept more than 145 million pounds of waste out of landfills”, says Xerox.

Almost all the OEMs have re-collection program for used cartridges, such as Samsung’s Samsung Take-Back and Recycle program (S.T.A.R.), the Lexmark Cartridge Collection Program, Ricoh Toner cartridge return, Konica Minolta’s Clean Planet Program and Kyocera’s KyoCollect Recycling Program, to name just a few.

We can also see that many OEMs cooperate with “Close The Loop”, where the organization dismantles the used cartridges and

recycles them. The OEMs involved are Brother, Canon, Epson, Fuji Xerox, HP, Konica Minolta and Lexmark, and the scheme also includes other companies such as Lanier, Toshiba and Panasonic.

How much do these recycling or collection programs contribute to the environment? How are they dealing with the used cartridges?

Just take a look at the HP website, all returned HP printing supplies go through a multi-phase recycling process. They're sent to recycling facilities and are reduced to raw materials that can be used to make new metal and plastic products. Plastics and metals from recycled HP printing supplies have been used to make automotive parts, microchip processing trays, serving trays, spools and other products. HP also says it “incorporates post-consumer recycled plastics – from sources such as water bottles and ink cartridges – into the manufacture of new Original HP inkjet print cartridges”.

Ricoh established the Comet Circle in 1994 for recycling material.

It puts priority on reusing and recycling products and parts.

www.recyclingtimes.com.cn | March 2011

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Features

When a part cannot be reused in a product, the company will recycle it as a material.

Samsung S.T.A.R. Toner cartridges are recycled into useable materials, which then go back into the raw materials marketplace to become a range of new products. Samsung has promised to ensure “the maximum value from each returned cartridge is obtained at the smallest environmental cost.”

All of the above-mentioned cases are recycling the cartridges.

Some of them work with organizations such as Close The Loop and dismantle the used cartridges and recycle them. None of them are remanufacturing cartridges.

With these programs, they promote themselves as being devoted to the environment and “minimizing impact on the globe”. Further, they have commissioned third party companies to do comparison tests, misleading promotion to customers by saying non-OEM printer supplies are bad in terms of both reliability and print quality.

The OEMs are working really hard to make non-OEM supplies look bad.

2. Twisted marketing tactics Just pay a little attention to the press, you will notice all kinds of test are out there that make the same claim – non-OEM printer supplies are inferior to OEM printer supplies. These results are having an impact on end consumers every moment and damaging the image of the aftermarket printer supplies industry.

Xerox sponsored SpencerLab, a credible third party testing organization to perform an independent reliability test of a range of third-party compatible and OEM Xerox Phaser 6360 toner cartridges, incorporating relevant methodologies from the ISO/IEC 19798 color yield standard.

“It’s not surprising that the report showed toner cartridges from the three non-OEM brands tested didn’t measure up to the quality provided with the genuine Xerox cartridges. After all, this was a vendor-sponsored test and if the results were not in Xerox’s favor, it’s not likely that it would have ever been published. The report, which can be found at www.spencerlab.com, specifically mentions toner leakage as a reliability issue with each of the three non-OEM brands. While this is certainly a major negative with some nonOEM products, one has to wonder why Xerox chose this model or these non-OEM brands to compare”, commented Andy Slawetsky, President of Industry Analysts, Inc., a marketing and management consulting firm for the office automation industry.

HP and independent testing lab QualityLogic have made public the results of a reliability study comparing the performance of original HP toner cartridges with those of various remanufactured and compatible cartridges available in Europe, the Middle East, and Africa (EMEA).

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In October 2010, QualityLogic completed a study for HP designed to test the print quality, cartridge reliability, optical density and toner adhesion of HP LaserJet print cartridges for the HP LaserJet P1505 (personal printer) and P4015 (workgroup printer), HP 36A and 64A, compared to a sample of non-HP toner cartridges sold as substitutes for them.

QualityLogic found that while there was no reliability issue with the OEM cartridges, 41.7% of the non-OEM cartridges exhibited a reliability problem such as not being usable on arrival, reaching an early end of life, or being low quality (meaning that 50% or more of sample pages were deemed as having limited use or being unusable). Specifically, three of the 215 non-OEM cartridges tested were dead on arrival or reached an early end of life, and 87 were deemed as low quality. HP cartridges also were rated as superior to non-OEM cartridges in the areas of print quality, optical density, and toner adhesion.

The study also suggested that original OEM cartridges outperformed non-OEM cartridges in all areas of the study – a result that should be of no surprise to those following the supplies industry. HP has commissioned similar studies in the past, with similar results.

Industry observer Charlie Brewer said: “Vendor-commissioned studies will always have skeptics, but most consumers and business users will only pay attention to the top-line results. Few will bother to question test methodology and whether some non-OEM brands performed better than others. Studies such as this help spread the message that remanufactured and compatible cartridges are unreliable and low quality, and this perception is one the nonOEM supplies industry has been struggling to combat for years.

Recycling Times Magazine

Features

Ultimately, the QualityLogic study will become just one more piece new-built OEM cartridge. Toner cartridges with long life cycles of evidence in the arsenal HP uses to compete against the non- can reduce carbon footprint by up to 60%. See figure 1 for more OEM supplies industry in the EMEA and elsewhere.” detailed information.

He also suggests solutions to combat the OEMs’ questionable Let’s say if China, Europe and the whole world consume marketing methods, “the non-OEM supplies industry, however, respectively 15 million, 44 million and 100 million cartridges, is no longer comprised largely of tiny, helpless “mom-and-pop” that’s 159 million cartridges altogether. Now let’s assume each shops. Firms such as Clover, Print-Rite, Ninestar, and others are new cartridge produces 7 kilograms of CO2 – that’s 1,113 million huge enterprises with enormous resources – certainly enough kilograms of CO2 . If each remanufactured toner cartridge will to commission a reputable testing lab to do further testing. We reduce this by 4 kilograms of CO2 , that represents a massive saving would be particularly interested in seeing how certain non- of over 636 million kilos of CO2 .

OEM cartridge vendors’ “premium” lines of product perform compared with OEM cartridges. Any takers?”

Andy Slawetsky also posted a very strong point about non-OEM printer supplies contradictions, he said: “we find it interesting that Xerox sells their own brand of non-OEM supplies for products from HP, Brother, etc.

You can find plenty of information on Xerox branded non-OEM products at www.xerox. com. The message that customers should only use genuine supplies for my printer but it’s OK to use them for other brands don’t fly.”

This is irony enough to prove that the OEMs are trying to scare consumers away from non▲ Figure 1 Percentage saving in CO2 emission for remanufactured cartridges A, B and C compared with OEM cartridges OEM printer supplies by suggesting non-OEM supplies are low quality.

From the above-mentioned study, we can easily see that Apart from third party reports, there are also many other remanufactured cartridges have a smaller impact on the outrageous programs. TVS, a prestigious TV media in Guangdong, environment than OEM toner cartridges. The more refill cycles a China reports that “counterfeit toner cartridges will cause cancer”. toner cartridge has, the greener it is. Each remanufactured toner However, this made a serious mistake in mixing up remanufactured cartridge reduces the environmental impact of each new-built printer supplies, compatible printer supplies and counterfeits. cartridge. OEMs are more likely to develop cartridges with a short They also had “experts” saying that all of the non-OEM printer life cycle or a disposable cartridge so as to maximize their profit. supplies were likely to cause many deadly diseases including In addition, OEMs have also developed some anticancer in different organs of human body. This message harms remanufacturing devices to restrict remanufacturing while the aftermarket printer supplies industry as a whole by sending remanufacturers tend to choose long life cartridges and cultivate customers extremely negative information and confusing them. We steady business for the sake of environment. believe there was a real agenda behind this episode.

Based on the different choices the two parties make, the OEMs deem the remanufacturers as enemy. The OEMs make it harder for the remanufacturers to reuse used cartridges. When it comes 3. Reman: greener option Remanufacturing or recycling? Which one has smaller impact on to raw material, the OEMs hijack the empties by launching all the environment? In order to find answers, the United Kingdom kinds of collection programs and justify their argument on being Cartridge Remanufacturers Association commissioned Xanfeon green by recycling the cartridges. During production, the OEMs Energy & Environmental Services to conduct some research in apply patents or other technologies to stop remanufacturers from 2008. reusing the empties. And at the end of it all, the OEMs announce The study showed that toner cartridges with short life cycles results of unreliable studies to the public and mislead consumers would reduce the carbon footprint 25%-40%, compared with a who are trying to buy printer supplies. www.recyclingtimes.com.cn | March 2011

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Features

4. Common enemy: counterfeit On HP’s Chinese site, there was a separate page titled “serious damages of non-OEM printer supplies (figure 2)”, it also makes the following claims on the site about five different types of damage non-OEM supplies may cause: • if non-OEM printer supplies are used, consumers will not be able to enjoy HP’s warranty • non-OEM supplies will shorten the life of printer and damage the printer

or 3.5 to 4% of the entire marketplace. New molded clones are sold as “new” or even “remanufactured” at incredibly low prices.

They most likely violate OEM intellectual property. The empties threaten even legitimate remanufacturers who were protected by the right to repair but lose that protection when it’s an infringing core”, said Tricia Judge, Executive Director of International Imaging Technology Council.

An ITP.net article reveals some shocking numbers about how rampant the counterfeit goods market is in Europe, the Middle

• print quality is not satisfactory • cheap, low quality non-OEM printer supplies harm your health • non-OEM supplies will have a bad effect on our universe.

Any consumer with no or little knowledge about remanufactured printer supplies will go to OEM printer supplies without blinking when they read about the five “damages” HP says non-OEM printer supplies can cause.

The term “non-OEM supplies” includes remanufactured, compatible and counterfeit printer supplies. Is this HP’s real intention – referring all non-OEM supplies to low quality products?

Remanufactured printer supplies are battle companions in the same fight to some extent. As more and more consumers accept remanufactured printer supplies, the remanufacturing industry is gaining more market share. Some consumers even take whether there are remanufactured printer supplies available on the market as one of the criteria informing their decision of buying a printer or not. Remanufactured printer supplies do take some market share from the OEMs. However, this also helps the printer and supplies market to flourish.

Counterfeit is the black sheep of the printer supplies market.

“Counterfeiting costs the industry $3 billion in lost legitimate sales,

East, and Africa (EMEA). HP recently commissioned research that shows nearly half of office purchasing managers in the EMEA region admit to purchasing counterfeit goods, including counterfeit ink and toner supplies and electronics. The survey also revealed that half of the companies surveyed would expect a 20% discount off the original price if they were actively seeking counterfeit goods, and about 20% of respondents said a mere 5% saving would be enough to persuade them to buy counterfeit.

HP also said that more than 50% of the companies it spoke to didn't have an active policy in place against the acquisition of counterfeit goods, with the figure as high as 72% in the UAE. According to The Imaging Consumables Coalition of Europe (ICCE), sales of fake printing consumables in EMEA alone cost the industry US$40 billion a year.

Counterfeiting also exists in China. The percentage of original, counterfeit and aftermarket printer supplies is generally considered to be 5:3:2. The issue of fake products in China is also exposed to the public on TV. On February 11, 2011, China Central Television Channel two (CCTV-2) unveiled a program about a case where the police seize the counterfeit printer supplies. This 50-minute program explained in great detail how the fake products got into the market and urged consumers to call the police when they bought counterfeit products.

This is definitely a good thing for OEMs and the aftermarket as well. “What could the aftermarket do about this threat? Nothing. Only the OEMs have the standing to take legal action. And the remanufacturing industry has waited for the OEMs to take action against this threat that has stolen dollars from both groups,” Tricia Judge said.

The OEMs should spare no effort in attacking fake products instead of hurting remanufacturing products.

The aftermarket should also educate consumers

▲ Figure 2 HP Chinese site screenshot

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about the benefit of choosing remanufactured printer supplies instead of counterfeit. The two parties should work together in cultivating a healthy market and business.

Recycling Times Magazine

Profiles

Where there's a will —Jackie shows the way to success for the ordinary From one glance around Jackie Zhang’s office, you wouldn’t know you are in the presence of someone outstanding. Carefully and charmingly appointed with family pictures, stocked with books of management and lit by walls of windows that welcome South China’s beautiful sunshine in, Jackie’s office doesn’t reflect a lot of the extraordinary woman she is.

Jackie, now 36, climbed the corporate ladder in Ninestar Image Co., Ltd, beginning as a sales assistant.

She is now an assistant general manager by profession and also the head of overseas sales. She is also a mother of a four-year old little girl. To honor the International Women's Day, Recycling Times features Jackie Zhang, a mother and a businesswoman in this issue.

1

Would you like to share the experience about how you came into aftermarket printer supplies industry?

Well, I joined Ninestar in 2003. I would say I chose this company rather than the industry at the beginning.

When I came here for interview, I sensed the positive energy around this place, where I wanted to work for sure. It turned out that my feeling back then was right.

Ninestar has a very open atmosphere and it is definitely a very good platform for someone to build a career. I started as an assistant, and then sales representative, s a l e s m a n a g e r, h e a d o f overseas sales department and now assistant general manager.

My responsibility involves overseas sales, product development, marketing and logistics.

related to international trade. I worked at several other companies before I joined Ninetar and the positions were all about sales. Actually, I am relatively a quiet and introverted person, not very talkative. This somewhat doesn’t match the portrait of sales staff. I think my personality helps me listen to customers more. When we consider everything from the customer’s point of view, we may serve the customer better and build trust with customer more easily.

3

What do you think is the key quality of a sales person?

I don’t think sales are a very difficult undertaking.

From my experience, I see many good sales people: some are ver y outgoing and establish connections with new customers easily; some have ver y good product knowledge and they know what to provide for customers, the customers will trust their attentiveness and the value they provide. I think different

2

Some say being a sales person is quite challenging. How did you come to start off as a sales person?

I majored in International Economy and Trade. When I graduated in 2000, I hunted a job directly or indirectly

▲ Jackie (in black) with customers

www.recyclingtimes.com.cn | March 2011

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Profiles

personalities have different strengths.

I think there is one special quality required if you want to be a great sales person. That is persistence. When we are turned down by a customer, we can take it as bad timing. But we will not give up this particular customer.

When we have new services and products, we need to keep all the customers informed. Sales people are always seeking the point of agreement with customers.

The more often we search for that point, the more easily we will get to that point and thereby grow our customer base.

Trust is of absolute importance when dealing with customers. We have to serve the customers, for their development, for their future.

4

Can you share your view on the aftermarket printer industry with our readers?

I think innovation and green are the trends and both are decisive for the future of the industry. As you may know, compatible cartridges enjoyed fast development during 2000 to 2003. However, the industry got really competitive later. Ninestar has tried to develop its own patents since 2001 and introduced them to the market.

However, the price was relatively high and they looked different from other printer supplies available in the market. That was why they didn’t sell very well. But the amount we sold out didn’t grow very fast.

You know some major Chinese aftermarket printer

▲

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supplies manufacturers were being targeted by the OEMs, with lawsuits or other means. Only Ninestar chose to stand up to the challenges and fight back. Now we’ve won respect from our customers and the market as well.

Recently, a high profile Spanish customer came to us in talks for cooperation. Actually, we’ve known this customer since 2009. This customer rejected our patented products before. Now the customer came to us! From the shift from rejection to opening arms, it proves that we chose the right direction on this path of evolvement. Innovation and patent development are not easy, but it is definitely the right direction.

Green is also another important feature. We are searching means to realize zero landfill. For example, we can remanufacture our own brand inkjet cartridges, simply by replacing the ink tank and the cartridge can work again.

5

You took up the position as assistant general manager and your focus has shifted from sales to management. What challenges did you encounter?

Sales are simpler for me. You can feel the sense of accomplishment by making breakthrough with negotiations or a customer. Turning to management; I need to think more about the strategy and long-term development plans instead of talking with individual customers. I also focus more on the team as a whole, not just looking at my sales numbers at the end of the day. Team work means a lot for us. If you take us out as individuals and screen us under the microscope, we may not be excellent; but if you look at our team, we are a very good team. We are nice; I mean that in a very good way.

If you get sick, we'll take care of you. We're not one of these mechanical cultures. We are real people working with real people. It's phenomenal. We are a team-based company.

Diversity is important and the differences in how you work and what your points of view Jackie explaining technical instructions

Recycling Times Magazine

Profiles

foundation for a future career.

Walk into any organization and use your brain, take chances without being reckless. Experiences really mean a lot to young woman, to young people.

7

What do you expect from you and the company for 2011?

I hope I can make some breakthrough in the strategy of Ninestar. The patent war will go on and this means challenge, but also opportunity. I hope we can seize the opportunity. â–˛ Jackie at work

are, these are are things that we love.

This team is my family. I don't mean that in a mooshy way. I have friends here. I learned to lead in this company. I got to work on these great problems.

This platform and this team is the reason I have stayed in this company for such a very long time.

6

Summary When I asked Jackie what she did to balance career and her beautiful family. She said she was just very lucky.

When I learned that she swims every day and even kept this up during pregnancy, it dawns on me that she has a very strong will. That is what it is about. How can be someone so strong not be capable in what she does?

You've spent your whole career in Ninestar. I think you were on the speeddial lists of many headhunters, but you didn't leave. What's your advice to a young woman starting out today who wants to be a very important person in a company?

First, don't start out wanting to be some big head. You're going to be really disappointed if you do that because you may end up doing things you don't love. I say this to every young person, not just young woman.

Find something that you love to do, and find a place that you really like to do it in. I found something I loved to do. Your work has to be compelling. You spend a lot of time doing it.

Secondly, for many Chinese women, I think having a baby is a major change to their career.

I agree on this. But the fact that some women in China might even give up the idea of having a child so that they can focus on their career is unacceptable for me. I don’t think that will get the majority vote, either. I suggest that women should spend their time before having a kid in doing a very good job and laying solid www.recyclingtimes.com.cn | March 2011

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Sales & Management

Are you attracting price shoppers?

By Ann Barr It is true that everyone is concerned about price, but is your marketing and advertising attracting the kind of customers you really want? Without realizing it, you might be appealing to exactly the kind of customer you don’t want. Do you want premium customers who care most about quality products and great service? Or do you want price shoppers who jump from supplier to supplier? Most of us want premium clients who appreciate top quality products, personalized service and excellent product knowledge.

In reality, only a small percentage of your customers are true price shoppers (excluding purchasing agents of large corporations and universities.) What are the characteristics of a true price shopper?

• Jump from supplier to supplier • Slow to pay • Quick to complain Advertising for price shoppers. Look at the focus with these advertisements: “Lowest possible pricing!”

“We will beat any price!”

Advertising using the words above is guaranteed to attract price shoppers. And when they call you, they will focus FIRST on price. Not a good way to start a conversation with prospects.

To attract premium customers, advertising must focus on great service, convenience, product knowledge and top quality products.

How to attract premium customers. Contrast the price ads above with the following: “Virgin Atlantic Business Class Flights are Better when you Fly Upper Class” “Purina Cat Chow: A Whole New Way to Better Taste.”

These ads focus on quality, value and service.

Handling price questions/objections. When a prospect asks “What is your best price?” at the beginning of a conversation, before you’ve had a chance to ask questions (and find out what they currently order and how much they are paying now) you can respond with: “Well, it depends on several variables. Let me ask you a few questions so I can quote you the best price for your situation.”

Be prepared with answers. You will feel more confident when you have prepared ahead of time for price objections.

Have answers ready in advance for the following questions: “Is that the best you can do?”

Your answer to the first question could be: “When your order is increased to six, you qualify for a quantity discount and you save $45. Would you like to order six today?”

And in answer to the second question: “Yes, you can get a better price. The next price break is at 12. The toners are $54.00 each instead of $59.00; You save $60.00. Shall I send you 12 toners?”

A price objection is often either: • A smoke screen • A request for more information • A perception that not enough value is attached to what you are sellingz Price and value. According to the findings of a 15-year study conducted by The Sales Board: More than 90% of all salespeople volunteer a price decrease without being asked!

In addition, most salespeople do not believe their product or service is actually worth the price they charge. The first person who needs to be sold on the value is you.

Get the word out. If you are not a discount store, and if you do not want to attract price shoppers, your efforts in marketing and advertising should reflect this fact. Think about everything else you provide along with the products you are selling: experience in the industry, product knowledge. If you offer superior service, good product knowledge and quality products, let prospects and customers know this. Focus on these positives and anything unique that differentiates you from your competitor and you will attract fewer price shoppers.

Bad referrals. Good referrals are crucial to any business selling products available at multiple sources. Do you really want price shoppers to refer other price shoppers to your company? That’s what may happen if you are advertising and selling on the basis of price.

Think about this: A recent Consumer’s Report study found that 73% of consumers buy for reasons other than price! So think twice before you focus on price in your marketing and advertising.

For more marketing and sales tips, please go to http:// sellingsupplies.com. www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

Sales & Management

For best results, forget the bonus

By Alfie Kohn "Do this and you'll get that." These six words sum up the most popular way in which American business strives to improve performance in the workplace.

And it is very popular. At least three of four American corporations rely on some sort of incentive program. Piecework pay for factory workers, stock options for top executives, banquets and plaques for Employees of the Month, commissions for salespeople -- the variations go on and on. The average company now resembles a television game show: "Tell our employees about the fabulous prizes we have for them if productivity improves!"

Most of us, accustomed to similar tactics at home and school, take for granted that incentives in the workplace are successful.

After all, such incentives are basically rewards, and rewards work, don't they?

The answer, surprisingly, is mostly no. While rewards are effective at producing temporary compliance, they are strikingly ineffective at producing lasting changes in attitudes or behavior.

The news gets worse. About two dozen studies from the field of social psychology conclusively show that people who expect to receive a reward do not perform as well as those who expect nothing. This result, which holds for all sorts of rewards, people and tasks, is most dramatic when creativity is involved.

Are rewards as ineffective inside the workplace as they are outside it? Apparently so. Despite decades of widespread reliance on pay-for-performance schemes, I know of no controlled study demonstrating that rewards improve the quality of workplace performance on a long-term basis.

At a Midwestern manufacturing company, for example, an incentive system that had been in place for years was removed at the request of the welders' union. Now, if a financial incentive motivates people, its absence should drive down production.

And that is exactly what happened -- at first. But after the initial slump, the welders' production rose and eventually reached a level as high as or higher than before.

Of course, these studies -- no matter how numerous -- are hard for most of us to accept. After all, "Do this and you'll get that" is part of the fabric of American life. From gold stars to candy bars, we have faith in rewards' redemptive power.

A closer look, though explains why incentive plans not only do not succeed, but cannot succeed.

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Rewards punish. Even executives who understand that coercion and threats destroy motivation may fail to recognize that the same is true of rewards. Punishments and rewards are not really opposites. They are two sides of the same coin, and the coin does not buy very much.

Like punishments, rewards are manipulative. "Do this and you'll get that" is not very different from "Do this or here's what will happen to you." The reward itself -- a bonus, say -- may be desired, but it is contingent on satisfying terms someone has imposed. Sooner or later, this sense of being controlled feels punitive.

Rewarding people is similar to punishment for another reason. When people do not get the rewards they were hoping for, they feel punished. And the more desirable the reward, the more demoralizing it is to miss out.

Rewards rupture relations. Research and experience show that excellence depends on teamwork, both because of the exchange of ideas it fosters and the climate of social support it creates. But the scramble for rewards -- particularly when they are made scarce, creating competition -- destroys this valuable cooperation.

Relationships between supervisors and workers, too, can collapse under the weight of incentives. If a supervisor wields sanctions, of course, employees will be about as glad to see that person coming as they would be to glimpse a police car in their

Recycling Times Magazine

Sales & Management

rear-view mirror. But even if the supervisor is a rewarder, the effect is essentially the same. Incentive-driven employees will not ask for help when they need it. Instead, they will conceal problems to appear infinitely competent, or they will resort to flattery.

Rewards ignore reasons. To solve productivity problems, executives must understand the causes. Are workers unable to collaborate effectively? Is long-term growth being sacrificed for short-term gain? Each situation calls for a different response. But incentive plans offer a one-size-fits-all answer that ignores what lies behind the questions.

Rewards deter risk-taking. When people are offered incentives they are less inclined to take risks, explore possibilities, play hunches or attend to anything whose relevance to the problem at hand is not immediately evident. In a word, the No. 1 casualty of rewards is creativity. The proof: a dozen psychological studies showing that the more people are led to think about rewards, the more they prefer easy tasks. Why? Not because of laziness, but because incentives encourage concern about what one is going to get.

In short, "Do this and you'll get that" makes people focus on the "that," not the "this." Do rewards motivate people?

Absolutely. They motivate people to get rewards.

Rewards undermine interest. Loving what you do is a more powerful motivator than money or any other goody. No surprise there. What is surprising is that goodies actually undermine personal motivation. The more an executive gets employees to think about what they will earn for doing their jobs well, the less interested they will be in what they are doing. Edward Deci, a University of Rochester psychologist, did pioneering studies on this effect in the early 1970's; his findings have been corroborated many times since then.

How does this happen? One explanation is that rewards are controlling. If people are led to think about getting a bonus, they start to feel their work is no longer freely chosen and directed by them. And to feel controlled is to lose interest. Another explanation is that the reward makes the work seem distasteful.

"If they have to bribe me to do it," a person might figure, "it must be something I don't want to do."

Whatever the reason, rewards turn play into work and work into drudgery. Worse, when rewards corrode intrinsic motivation, workers have no other reason to put out an effort. This pattern, in turn, confirms supervisors' beliefs in the need for incentives. It is a self-fulfilling prophecy.

Small wonder, then, that a growing number of executives are scratching their heads over the failure of their reward programs.

Typical is an August article in a leading human resources journal:

"Why No One Likes Your Incentive Plan."

Unfortunately, most executives believe the problem lies in the particulars of their program, and so they devise new variations on the same behaviorist theme. Countless consultants live handsomely from devising yet more ways to compute bonuses, for instance. Others persuade employers that team incentives are the way to go, or that they need to reward quality, not quantity.

But all these fixes miss the point. Trying to correct the trouble by revising a pay-for-performance program makes as much sense as treating alcoholism by switching from vodka to gin.

The problem is not with compensation, per se, but with pushing money into people's faces by offering more of it for this or that. The more closely pay is linked to achievement, the more damage is done.

If rewards do not work, what does? I recommend that employers pay workers well and fairly and then do everything possible to help them forget about money. A preoccupation with money distracts everyone -- employers and employees -- from the issues that really matter.

Those issues might be abbreviated as the three C's of quality: choice, collaboration and content. Choice means workers should participate in making decisions about what they do. Collaboration means they should be able to work together in effective teams.

Content refers to the job's tasks. To do a good job, people need a good job to do.

Doing these things is much more difficult than dangling goodies in front of workers. But manipulating behavior by offering rewards, while a sound approach for training the family pet, can never bring quality to the workplace.

Note: Copyright 1993 by Alfie Kohn. Reprinted from New York Times with the author's permission. www.recyclingtimes.com.cn | March 2011

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Market Data

OEM last quarter performance: some smile, some shy Canon: profit falls due to lower prices Overview Canon revealed on January 27 that its fourth quarter profit fell 12%. The company contribute this to the lower prices of digital cameras and office equipment. The net profit for the October-December quarter was 54 billion yen ($657 million).

Quarterly sales rose 11.9% year-on-year to 1.07 trillion yen thanks to a steady global demand for laser printers and highend digital cameras.

operating expense to sales ratio of 37.6% for the year, an improvement of 0.1%. Consequently, operating profits recorded growth of 78.6% to ¥387.6 billion (US$4,785 million) for the year.

Other income (deductions) recorded an increase of ¥3 billion (US$37 million) due to an improvement in equity earnings of affiliated companies, leading to income before income taxes for the year of ¥392.9 billion (US$4,851 million), an increase of 79.1% year-on-year.

The sales for the year totaled ¥3,706.9 billion (US$45,764 million), an increase of 15.5% from the previous year, owing to a substantial recovery in sales of laser printers, continued robust sales of such consumer products as digital SLR cameras, an increase in sales within the industry and others segment, and the effects of consolidation arising from corporate acquisitions, such as that of Océ N.V. Canon said that within the office equipment market, demand for network digital multifunction devices (MFDs) recovered, mainly for color models, while laser printers also realized a steady rebound compared with the previous year.

Around 80% of Canon's total revenue comes from outside Japan. Foreign sales rose 15% from a year earlier. Domestic sales were flat during the quarter.

Al tho ug h t he st ron g yen ha d a significant impact, the gross profit ratio rose 3.6 points year-on-year to 48.1% mainly reflecting the launch of new products and ongoing costcutting efforts, along with heightened production turnover accompanying ramped-up production. As a result, gross profit rose by 24.9% to ¥1,783.1 billion (US$22,104 million) for the year.

For the 2010 calendar year, Canon's net profit surged 87.3% to 246.6 billion yen with revenue up 15.5% at 3.7 trillion yen.

Canon expects its net profit to grow by 25.7% to 310 billion yen in 2011 with revenue up 10.6% at 4.1 trillion yen.

Despite the impact of consolidation, spending cuts contributed to an

Net income attributable to Canon Inc. grew by 87.3% to ¥246.6 billion (US$3,044 million) for the year.

Looking at Canon’s quarterly performance by business sector, within the Office Business Unit, the sales volume of both color and monochrome network digital MFDs increased, boosted by the recovery in demand for office equipment along with the introduction of new imageRUNNER ADVANCEseries products.

Laser printers Laser printers, which suffered sluggish sales in the previous year, recorded a substantial increase in sales volume. Consequently, despite the effects of the strong appreciation of the yen, the sales for the segment totaled

www.recyclingtimes.com.cn | March 2011

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Market Data

¥1,987.3 billion (US$24,534 million), growing 20.8% yearon-year. Operating profit increased by 27.9% to ¥293.3 billion (US$3,621 million) for the year, mainly as a result of expanded sales and the rise in the gross profit ratio.

Inkjet printers With respect to inkjet printers, the sales volume increased from the year-ago level, fueled by healthy sales growth, particularly in Asia. As a result, despite the strong yen, sales for the segment rose 6.9% year-on-year to ¥1,391.3 billion (US$17,177 million), while operating profit increased by 29.7% to ¥238.1 billion (US$2,939 million), largely reflecting increased sales and gross profit ratio.

Lexmark: strong quarter Lexmark also had a strong quarter. "2010 was a very good year for Lexmark," said Paul Rooke, Lexmark president and chief executive officer. "We grew revenue 9% driven by a record performance in laser revenue, significantly expanded our operating margins, and generated cash flow of more than half a billion dollars.”

"Lexmark’s managed print services continued to experience rapid growth as we earned the business of some of the world’s largest companies, leveraging our industry leading, cloud-based fleet management software tools. Additionally, our acquisition of Perceptive Software, a leader in enterprise content management software, extends our value and represents another key step in growing software and services to help businesses of all sizes save time and money," added Rooke.

Full year results GAAP revenue of US$4,200 billion represented a yearon-year growth of 8%, driven by a record laser revenue of US$3,006 billion, up 15% year to year.

GAAP earnings per share for 2010 were $4.28. Excluding $0.68 per share for restructuring-related and acquisitionrelated adjustments, earnings per share for 2010 would have been $4.96. GAAP earnings per share for 2009 were $1.86.

Earnings per share for 2009 would have been $3.26 excluding $1.40 per share for restructuring-related adjustments.

Hardware revenue grew 13% in 2010 to $1,062 billion.

Supplies revenue of $2.915 billion grew 6% in 2010. Software and Other revenue was $223 million, or $236 million excluding acquisition-related adjustments.

Imaging Solutions and Services (ISS) revenue of $4,162 billion grew 7% in 2010. Perceptive Software revenue in 2010 ( June 8 – Dec. 31, 2010) was $37 million, or $50 million excluding acquisition-related adjustments.

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March 2011 | www.recyclingtimes.com.cn

Xerox: revenue surges Xerox Corporation announced fourth-quarter 2010 results that include adjusted earnings per share of 29 cents and $1.3 billion in operating cash flow. Adjusted EPS excludes 17 cents primarily related to restructuring charges and amortization of intangibles, resulting in GAAP EPS of 12 cents.

Fourth-quarter revenue of 5.98 billion was up 42% including a one point negative impact from currency. On a pro-forma basis, with ACS in the company’s results, total revenue grew 2% or 3% in constant currency. Revenue from technology, representing the sale of document systems, supplies, technical services and financing of products, was flat or up 1% in constant currency. Total install activity for Xerox equipment was up 6%, reflecting solid demand across all product segments. Revenue from services was up 5% on a proforma basis or 6% in constant currency, and represents the company’s business process, IT and document outsourcing offerings.

Annual results For 2010, Xerox posted a profit of $1.30 billion or 94 cents per share compared with $613 million or 70 cents per share in the previous year. The profit was higher than the Zacks Consensus Estimate by a penny. Revenue soared 42% to $21.6 billion from $15.2 billion in 2009.

Segment performance Revenues in the Technology segment slid marginally to $2.85 billion from $2.86 billion last year, driven by flat supplies revenue. The segment profit increased $31 million to $301 million from the last year.

The increase in profit was attributable to lower costs and expenses reflecting restructuring savings and lower bad debt expenses, which more than offset the decline in gross profit caused by the unfavorable impact of transaction currency and mix.

For the full year, Xerox grew equipment sales 10% in constant currency, reflecting strong demand for new

Recycling Times Magazine

Market Data

products and expanded global coverage as the economy improved and businesses began to invest in technology again.

Revenues in the services segment nearly tripled to $2.71 billion from $928 million in the fourth quarter of 2009. This was attributable to a stupendous growth in revenues to $1.48 billion from $24 million in BPO services, which accounted for 54% of total revenue in the segment.

Xerox monitors page growth and machines in the field (MIF). More MIFs lead to more pages. More pages generate more revenue from supplies and technical services. For Q4, the company saw continued growth in MIF supported by a 6% increase in installed Xerox equipment.

And through color printing, it continues to drive an increase in share in MIF and in pages. Total revenue grew 6% in the quarter, 8% for the full year.

Big contributors to this growth rate are the Xerox Color 800 and 1000 series and the ColorQube family of multifunctional systems, which uses Solid Ink technology. Xerox is growing ColorQube systems line, scaling Solid Ink investments.

The company also saw a pickup in usage trends during Q4, which led improvements in digital pages and color page growth. As color continues to replace black-and-white printing in office and production environments, color pages grew 11% on a year-over-year basis. This was a good sign for the company to offset declines in black-and-white pages.

Epson: inkjet printer net profit down Epson announced its third quarter results at the end of January. The situation in the main markets of the Epson Group (Epson) was as follows.

Demand for consumer inkjet printers was weak overall, with unit shipments flat in Europe and contracting in North America. Business inkjet printer demand steadily climbed in China and other parts of Asia enjoying economic growth, while corporate belt-tightening was seen in the printing industry and other sectors in Europe and the U.S. due to economic uncertainty. While the serial dot-matrix printer (SIDM) market is contracting in America, Europe, and Japan, demand remained firm in some regions, including China, Southeast Asia, and South Asia. In POS systems, retailer capital investment trended upward compared to the same period last year but lacked vigor. Projector demand was firm, especially for low-end business and education models and for

full high-definition models for home theater.

Third-quarter net sales were ¥268,044 million ($3,289,287 thousand), down 7.1% compared to the same period last year. Also on a year-over-year basis, operating income was down 38.9% to ¥19,231 million ($235,992 thousand), ordinary income declined 42.8% to ¥17,671 million ($216,848 thousand), and net income fell 61.0% to ¥9,545 million ($117,130 thousand).

The information-related equipment segment mainly includes color inkjet printers, page printers, serial impact dot matrix printers, large-format inkjet printers and related supplies, color image scanners, miniprinters, printers for use in POS systems, 3LCD projectors, LCD monitors, label writers and personal computers.

Information-related equipment Compared to the year-ago quarter, information-related equipment net sales decreased by ¥13.3 billion. Electronic devices net sales declined by ¥12.1 billion and precision products net sales increased ¥1.8 billion. Printer business net sales declined.

In inkjet printers (including both hardware units and consumables, as in all printer discussions below), unit shipments of consumer models were flat year-over-year.

Although new consumer printers did well in Europe and America, unit shipments were hurt by fierce competition in Asia. In the business printer category, unit shipments of large-format printers grew, in a large part due to the effects of new products for the signage market in North America.

Unit shipments of consumables, on the other hand, declined, while average selling prices rose. Office inkjet printer sales were firm, thanks to a series of business wins. SIDM printer unit shipments rode higher on the back of increased demand associated with China’s tax collection system, while www.recyclingtimes.com.cn | March 2011

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Market Data

shipments of POS system products Quarterly Net Sales XBy business segment to small- and medium-sized retailers (Billions of yen) Consolidated Total likewise increased.

288.4 247.2 239.2 240.0 268.0 288.4 268.0 247.2 239.2 240.0 Y/Y -20.4 350.0 However, price erosion progressed Precision 0.6 in both SIDM printers and POS system 300.0 15.7 Products 1.0 17.6 products. Page printer hardware 1.4 Y/Y +1.8 0.5 0.5 250.0 14.2 69.4 16.7 18.6 57.2 shipments increased as a result of Electronic 61.3 60.3 200.0 61.8 Devices successful tenders, but net sales were Y/Y -12.1 150.0 adversely affected by ongoing price Information Equipment 212.9 erosion, as well as by a decline in sales 100.0 199.6 179.9 170.1 167.5 Y/Y -13.3 of consumables due to a past dip in 50.0 page printer shipments.

0.0 Eliminations -7.8 -8.9 -8.8 -10.6 -10.1 Moreover, the effects of increase -50.0 in sales were largely canceled by 2009/Q3 2009/Q4 2010/Q1 2010/Q2 2010/Q3 advances in the yen. ▲ Figure 1 Quarterly net sales by business segment (Epson) Inkjet printer unit shipments were flat year-over-year, but net sales fell Quarterly Net Sales Comparison XInformation Equipment Segment due to a decline in consumables.

(Billions of yen) 212.9 199.6 Seen by region, the American printer 212.9 199.6 PC, Other 240.0 Y/Y +0.4 market contracted and the European • PRJ: Volume up in 220.0 enterprise, education & 4.5 Visual market was flat amid a somewhat 200.0 home markets, sales down 4.9 Instruments 28.8 on forex, etc.

26.8 180.0 lackluster year-end shopping season.

Y/Y -2.0 160.0 % sales However, Epson managed to increase ’09/Q3 ’10/Q3 • IJP: Hardware volume flat, 140.0 PRJ 88% 92% sales down on lower inkjet unit shipments and extend its Other 12% 8% consumables volume & forex 120.0 • PP: Hardware volume up, but market share in the U.S. and Europe.

Printers 100.0 sales down on lower 179.7 consumables volume 168.3 Y/Y -11.3 Epson also saw unit shipments 80.0 • BS: SIDM remained steady in China, POS sales flat on % sales 60.0 rise in Japan. In Asia unit shipments higher volume for retailers in ’09/Q3 ’10/Q3 Europe and China 40.0 IJP 71% 71% of inkjet printers declined, in part PP 11% 10% 20.0 BS 16% 17% because the company is in the midst IJP Inkjet printer SCN 2% 2% 0.0 -0.5 -0.2 PP Page printer BS Business systems of deploying a new business model in POS Point of sales -20.0 Eliminations SCN Scanner 2009/Q3 2010/Q3 PRJ Projector this region. Against the background of ▲ Figure 2 Quarterly net sales comparison (Epson) a sluggish market, unit shipments of It anticipated a stronger bounce and stronger growth in consumables declined year-over-year.

Page printer unit shipments rose in Europe and Japan, consumer inkjet printers, but unit shipments fell below largely due to the aggressive pursuit of tender opportunities, expectations due to the lackluster European and American markets and because it refused to follow competitors’ but net sales declined due to a drop in consumables volume.

Business systems net sales hovered near the level of the aggressive price cutting. The launch of new large format year-ago quarter. China generated steady demand for SIDM printers enabled it to slightly exceed the plan in this category. printers because of the introduction of a new tax collection Consumables net sales were below the outlook, largely due system (for more information about this system, please to the effects of a shortfall in hardware shipments.

In business systems, total net sales were below expectations contact Recycling Times editors), while retailers in Europe and China were behind an increase in unit shipments of POS- because, although SIDM printer sales were steady in China and other parts of Asia, large-scale POS-related product sales related products.

0.3

0.3

0.4

(*Adjusted)

0.2

0.2

(*Adjusted)

, other

Net sales of inkjet printers ended below expectations, as the company failed to achieve unit shipment targets for both printers and consumables. The company was somewhat bullish going into the year-end shopping season.

opportunities failed to emerge to the extent expected in Europe and America.

Page printer net sales ended below expectations, as Epson failed to meet its sales target in Europe. www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

Legal Issues

The winter of patent war is sweeping the Europe

By Jarek Yang, Senior Engineer for State Key Laboratory of Fine Chemicals The compatible printing supplies industry after Epson’s resent lawyer letters on patent infringement Recently, Epson has been rattling its patent saber towards the compatible inkjet cartridge manufacturers and retailers by continuously issuing letters alleging the products are infringing its patents, which puts the players in the industry on tenterhooks.

From the ver y beginning when compatible firms entered the consumables market, they were destined to stay on the opposite to the OEMs, marching into incessant patent wars – the 1997 HP refill cartridge war, the 2000 Epson ink ingredient war, the 2002 Lexmark digital copyright war, the 2004 Canon cartridge recycling war, the 2006 Epson 337 US ITC investigation, the 2010 Brother LC980 war and Hewlett-Packard’s HP02 war.

In the early days, many retailers didn’t take the patent issues seriously but only cared for the market demand until Epson’s started to issue a number of legal letters, which can be considered as the biggest patent war.

Ever since, the retailers have been aware of this and are seeking for new ways to source their products or still anticipating in the war.

The letters show us Epson’s determination to rectif y the market.

Anyone who’s still tuning a blind eye to the action is destined to pass away. The time to restructure the European compatibles market is approaching. General ▲ Jarek Yang inkjet cartridges are in a fight fot survival, the market is becoming a ruthless battlefield rather than a money generator, not a stage for pirates but for the innovators.

The OEMs will not let compatibles have their own way easily anymore. The market is going to be split by the OEM and patent products instead. Will you put your business onto the road with no returns? Does the OEM only eye on the European market? The answer is definitely “no”, this is a global issue. Choosing patent products is the only way out.

Epson’s recent letters on patent infringement is just like the 2006 USITC 337 investigation, fully indicating its intention to sweep aside the compatibles manufacturers and retailers around the world. After many cruel battles, there is one company consecutively standing there and still maintains a steady growth rate, this is Ninestar.

There is no deny that the patent war is the war of masters and only the companies who own real patent products, a strong patent R&D team, a team of legal experts and powerful capital strength is able to win, to break the monopoly and to bring business safety to the retailers.

Disclaimer: This article represents opinions of the author, not necessarily of this publication.

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Recycling Times Magazine

Legal Issues

China’s new patent law–influence and interpretation (part one)

By Kan Zu, Unitalen Attorneys at Law

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Background of the new patent law In the past five years, the number of patent applications in China rose from 476,264 in 2005 to 976,686 in 2009, about a 20% increase each year. Among these applications, the number of patent applications from Chinese domestic applicants increased from 383,157 in 2005 to 877,611 in 2009, and Chinese domestic

time, was adopted on December 21, 2009 and came into force on Jan 1, 2010. Further, the Implementation Regulations for the New Patent Law were issued on Jan 9, 2010. The New Patent Law, Implementation Regulations and Interpretation will have some influence on the patent prosecutions and patent infringement litigations in China.

applications as a proportion of all the applications increased from 80% in 2005 to almost 90% in 2009.

Following this patent application increase, a strong motivation exists for the domestic patent owners to protect their patents and innovations. Further, since 2006 China has been promoting independent innovations, and even the 17th National Congress of the CPC defined the enhancement of China’s capacity for independent innovation and the construction of an innovative country as being at the core of the national development strategy, changing the country from a manufacturing country to an innovating country.

China is investing heavily in R&D and education, and its innovation environment is improving. Its innovation performance is expected to rise from 54th to 46th place worldwide between the periods 2004-08 and 2009-13. According to the OECD, China’s R&D spending reached US$87 billion in 2006 and as a share of GDP reached 1.4%. The government’s target is to reach 2% by 2010.

Unlike the situation five years ago, not only foreign companies but also Chinese companies and the Chinese government have strong requirements for patent protection. Both Chinese companies and Chinese government have started to invest heavily in R&D. Without good protection of intellectual property, no incentive exists for them to continue to invest in building this innovative nation.

Under above circumstances, on December 27, 2008 China passed its third amendment to the Chinese Patent Law (“New Patent Law”), and the New Patent Law came into effect on October 1, 2009. Following the New Patent Law, the interpretation of the Supreme Court on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Dispute Cases, which has been awaited for a long

Here we try to summarize some of the changes brought about by the New Patent Law and the Interpretation to provide some information that we suppose will have influence on court practice in the future. While some regulations have been provided in the New Patent Law and its Interpretation for the first time, in practice they have been adopted and applied for a long time. For example in the Interpretation, the Supreme Court has confirmed for the first time its approach to a patent claim interpretation and has formally introduced a doctrine of file wrapper estoppel, but this has been applied in practice for more than ten years.

March 2011 | www.recyclingtimes.com.cn

Double patenting In July 2008, the Supreme Court vacated the appeal court’s final judgment and affirmed the judgment by trial court upholding the validity of Chinese patent No. 92106401.2, granted on Oct. 13, 1999, by finding no double patenting.

In December 2000, the Jining Non-Pressure Boiler Factory challenged the validity of Chinese patent No. 92106401.2 ( known as the ‘401 patent) filed on Feb 22, 1992 by Mr. Xuezhang Shu by submitting a Chinese utility model No. 91211222.0 (the ‘222 utility model) which contained almost same claims and was filed by Shu on Feb 7, 1991 and was granted on June 17, 1992, but the utility model expired on Feb 8, 1999 as the utility model was filed under the first

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Legal Issues

version of Chinese Patent Law which offered at most eight years protection for utility model.

The Boiler Factory alleged that the granting of the ‘401 patent caused double patenting which was in violation of article 12 of the Implementation Regulations in Chinese Patent Law (the first version in 1992). Shu argued that the ‘401 patent was granted after the ‘222 utility model had expired so that there was no double patenting, two identical patents existed in the same time.

The Patent Reexamination Board affirmed this, finding that the grant of ‘401 patent did not violate Article 12 of the Implementation Regulations for Chinese Patent Law (1992 version) as when the ‘401 patent was granted the ‘222 utility model had expired.

The Beijing First Intermediate Court (“the Trial Court”) affirmed this, holding that neither the Chinese Patent Law nor the Implementation Regulations of Chinese Patent Law prohibited an applicant to file applications for an invention patent and a utility model for the same invention at different times, and an applicant seeking protection for the technology more quickly may try to file an invention patent application and a utility model application later, or vice versa. , This is largely due to the fact that the two types of patents have different features. The invention patent has 20 years’ protection and the utility model has a quick examination procedure.

The purpose of Art 12 of Implementation Regulation of Chinese Patent Law (1992 version) was to avoid an identical invention to be granted a patent more than once. “Same intention can only be granted as one patent” should be interpreted that there shall not exist two (or more than two) valid patents for the same invention; no statutory double patenting. As the ‘401 patent and the ‘222 utility model did not have an overlap protection period, the two patents did not constitute double patenting.

While vacating the judgment by the Trail Court, the appeal court, Beijing High Court held that “double grant” determination for double patenting should be made as a granting of the patents twice for the same invention, but the existence of two patents for the same invention is not sine qua non of double patenting.

The patent system not only protects the patent owners but also public interests. The technology described in a patent would enter into public domain once the patent is expired and therefore anybody would be free to use it. Here, the ‘222 utility model expired on February 8, 1999 and thus the technology described in the utility model entered into the public domain.

When the ‘401 patent was granted on Oct 13, 1999, it took back the technology from the public domain and awarded it to

the patent owner, causing the public confusion regarding the freedom to use the technology. The appeal court concluded that the grant of the ‘401 patent was double patenting.

The Supreme Court accepted re-hearing request in 2007 and vacated the judgment by the appeal court in 2008 by upholding the interpretation by the Trail Court that Article 12 of Implementation Regulations of Chinese Patent Law (1992 version) should be understood that the same invention cannot have two or more than two valid patents in existence. Hence, under the current patent system, the same applicant might file applications for an invention patent and a utility model for the same invention and it would not violate the rule of double patenting under the condition that the invention patent did not co-exist with utility model.

The Supreme Court’s judgment prompted lot of debate among judges, private practioners, scholars, and so on criticizing that the Supreme Court for having too broad an interpretation.

After the amendments, the New Patent Law still offers the opportunity for an applicant to secure a quick but limited patent protection while the application of invention patent is pending by filing an application of utility model. However, obviously the legislativation has considered Shu’s case, and although it does allow one applicant to file applications for an invention patent and a utility model for the same invention, the applicant must meet all three criteria below to get the invention patent application granted.

1. applications of invention patent and utility model for the same invention must be filed on same day 2. the granted utility model is not terminated 3. the applicant explicitly states to abandon the granted utility model.

The strict requirements for an applicant to file applications for both invention patent and utility model would effectively avoid situations where the protection period of a patent is unreasonably extended and allow an applicant to enjoy exclusive use of technology which is in the public domain. www.recyclingtimes.com.cn | March 2011

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Recycling Times Magazine

Tech Zone

Remanufacturing the HP LaserJet P1606 Series toner cartridge CE278A

By Mike Josiah and the Technical Staff at Uninet Imaging In May 2010, Hewlett Packard released the LaserJet P1606 printer. The HP-P1606 series of laser printers are based on a 25 ppm, true 600dpi Canon engine. These cartridges use a chip that controls the toner low functions. The CE278A is rated for 2,100 pages.

The printer itself has a very small foot print.

It’s a nice small office/home machine. The memory is fixed and not expandable at 32Mb. The recommended monthly volume is from 2502000 pages/month. These machines also have a new feature called “Smart install” the printer driver

is built into the printer so no drivers need to be installed. Just plug in the USB or Ethernet cable and you can start printing!

The printer when new comes with a starter cartridge that is rated for 1000 pages at 5% coverage, so your customers will be coming to you fairly quickly! The starter cartridges and replacement CE278A (2100 page) cartridges are physically the same so you can make a standard cartridge from the starter.

So far there are two printers based on this engine.

The P1606 and the P1566 (Sold in Asia).

The new cartridge is a modified version of the older P1006 cartridges. In fact many parts for those cartridges work in these also.

Cartridge troubleshooting as well as running test pages, cleaning pages and some simple printer troubleshooting will be covered at the end of this article.

The theory for these cartridges is a little different from past versions so we have covered it here. You don’t have to know the theory to remanufacture cartridges, but it sure helps if you have a problem.

Troubleshooting time can be dramatically reduced.

▲ 78A-Top

▲ 78A-Bottom

▲ 85A-Top

▲ 85A-Bottom

▲ 78A-Left

▲ 85A-Left

▲ 78A-Right

▲ 85A-Right

Figures I-P show the differences from another newly released cartridge for the HP P1102 series of printers, the CE 285A cartridge. Neither of these two cartridges are compatible with the P1006(CB435A) or P1505(CB436A) cartridges. They are all physically different.

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March 2011 | www.recyclingtimes.com.cn

Trade Center “TISHINKA”, T-Modul • Moscow • Russia

Russia is a huge growing printing market:

In 2009 alone, over 6,000,000 compatible cartridges and over 34,000,000 remanufactured cartridges were sold in Russia.

OEM companies managed to sell just 9,200,000 cartridges.

The potential of Russia’s aftermarket of printing supplies is visible with an unarmed eye.

Is your company among the suppliers of spare parts for remanufactured cartridges or of compatible cartridges? Is your company in search of new markets? Is your company on the watch for opportunities?

Consider Russia - one of the fastest growing printing markets in the world!

We can take you there:

RechargRussia Expo 2011 is your pathway to the Russia aftermarket of printing supplies!

Special exhibitor’s packages: • special ad discounts in both of the RechargEast and RechargRussia Magazine; • monthly mail distribution to all our Russian database (3,000+ companies): the emails include exhibitors’ profiles and hot offers; • monthly bulletins to all exhibitors full with important information about the Russian Remanufacturing Industry as well as large local buyers of compatible finished ink and toner cartridges.

Contact our representatives for more details.

Mirena Polihronova

| support@rechargeast.com

Toby Tan

| Toby@abcolors.cn

Alisa Andreeva

| assistance@rechargrussia.com

www.rechargrussiaexpo.com

Recycling Times Magazine

Tech Zone

Supplies required • HP-P1606 toner

• New Drum

• Replacement chip (Dedicated

• Wiper Blade

• Dr. Blade

• Magnetic roller

• Sealing Strip

• Cotton Swabs

• Isopropyl Alcohol

• Drum Padding Powder

• Conductive Grease

• Phillips head screw driver

• Small Common screw driver

Tools Required

step >

step >

• Needle nose pliers

3

6

• Jewelers Screwdriver set

Remove the two screws and the wiper blade.

Slide the waste/drum section over to the left side. Separate the two halves.

1

step >

5

step >

On the waste/drum section, lift the drum up from the gear side. Twist and remove from the hopper.

44

2

With the pair of needle nose pliers, release both the hopper tension springs.

March 2011 | www.recyclingtimes.com.cn

Remove the PCR and clean with your standard PCR cleaner.

8

Coat the new/cleaned wiper blade with your preferred lubricant. Install the wiper blade and 2 screws.

step >

step >

4

7

Clean out all the waste toner from the hopper. Be careful not to damage the recovery blade located next to the wiper blade. If this blade is bent in any way, the cartridge will leak. Make sure the wiper blade foam seals are clean.

step >

step >

With the handle facing you, Remove the Right side screw and end cap from the cartridge. Be careful of the drum cover spring! Remove it with the end cap.

Recycling Times Magazine

step >

Tech Zone

16

Remove the doctor blade and two screws.

9

14

Remove the single screw and end from the opposite side.

step >

11

Install the new/cleaned drum hub side first.

Place the waste/drum section aside.

12

On the toner supply chamber right side, Remove the two screws and end cap.

step >

Place another small amount of conductive grease on to the metal drum axle.

15

Remove the magnetic roller assembly.

Be careful of the bushings! They are very fragile.

step >

step >

10

step >

place.

step >

Remove the gears from the hopper as shown; Leave the large auger gear in

17

step >

13

18

Fill the hopper with P1606 toner.

step >

step >

step >

Install the cleaned PCR. Place a small amount of conductive grease on to the black holder side of the shaft. Just a small amount of grease is more than sufficient.

19

When a seal becomes available, remove the seal port plug, and install the seal.

Clean out all the remaining toner from the hopper. Make sure the magnetic roller seals and the doctor blade seals are all clean.

www.recyclingtimes.com.cn | March 2011

45

Welcome to RechargRussia Expo 2011, Your Pathway to the Russian Aftermarket of Printing Supplies!

RechargRussia and RechargEast Magazines, well-reputed magazines specialized in the aftermarket of printing supplies in Russia and Eastern Europe, are happy to invite your company to take part in the VIIIth edition of RechargRussia Expo 2011, which will take place in Moscow, Russia, on May 18, 19, 20, 2011.

The RechargRussia Expos are traditionally organized in Moscow, which hosts this exceptional and unique event for the printing industry every year. The exhibition attracts thousands of specialists from the aftermarket of imaging and printing supplies. Owner, managers, technical specialists and salesmen from Russia and CIS countries are the main visitors of the exhibition.

RechargRussia Expo is the only professional event in the field of printing supplies organized in the Russian capital. Leading manufacturers and distributors of toner, inks, OPC drums, parts, remanufactured and compatibles cartridges all gather in Moscow each year to show their best products to the Russian aftermarket companies. Local distributors, resellers, rechargers come to the exhibition to get to know local and international exhibitors, get updates on market trends, start new and reinforce existing relationships and partnerships.

Our experience in organizing 7 consecutive specialized exhibitions in Russia is extremely valuable and can be used by your company to its utmost profit.

Feedback from the 2010 exhibitors: Steven Yao, APEX, China: “The 2010 expo exceeded our expectations. We will surely take part in the show in 2011 and will probably choose to have a bigger booth to display all our products”.

Angela Shekyls, SPEED INFOTECH

Be in Moscow on May 18 and 19, 2011, when you will have the opportunity to attend the presentations of the 20 biggest buyers of compatible and remanufactured cartridges in Russia and CIS! With the total annual purchasing power of over $250 million, these companies are the leaders in the market. Don’t miss the chance to meet them personally as they are always open to new mutually beneficial partnerships.

Russian companies buy remanufactured and compatible cartridges for over $586 million* per year. (*Source: Business-Inform, Russia) Market share (%)

Holdings, Ltd., Russia/China: “The 2010 exhibition was good to our company.

We met many visitors from the last year’s show. Although we didn’t get too many

Genuine supplies Compatible supplies Refills

new customers from the 2009 show, but in 2010 the prospects are looking good. This

Russia Market of Printing Supplies in 2004-2009

year there have been much fewer end users, but the number of distributors has grown.

In addition, we’ve had many visitors from the far regions of Russia. We are definitely Year

interested very much in participating in the expo in 2011.”

Ozlem Eris, IPM, Turkey: “In 2009 we established fruitful cooperation with

Qty, million units Qty, original cartridges Qty, non-original cartridges Qty, refills

Russia Market of Laser Printing in under 45 ppm Segment

some Russian companies. In 2010 we are expecting to make our position even stronger in this market. All this happened with the help of RechargRussia Expos. We are glad that we participated in RechargRussia Expo 2010 and we have already reserved our booth for 2011.”

Year

www.rechargrussiaexpo.com

Recycling Times Magazine

Install the doctor blade and two screws.

Bring the tail out through the seal port hole. Install the plug.

23

step >

Install the left side end cap and screw.

Make sure the small contact piece is installed correctly on the end cap.

step >

21

24

Install the gears as shown.

step >

step >

Install the magnetic roller black bushing side first. Turn the roller until the keyed end locks in place.

25

Install the end cap and screws.

step >

20

22

26

step >

step >

step >

Tech Zone

27

Place the drum/waste hopper into the toner hopper. Slide it over so the round hinge pins fit into their respective holes.

Set the hopper tension springs back in place.

www.recyclingtimes.com.cn | March 2011

47

Recycling Times Magazine

step >

With the drum cover spring as shown on the end cap, install the end cap. Lift up the tail of the spring to fit onto the hopper.

29

Lift up the drum cover sprint tail to fit as shown on the drum cover. Install the screw into the cover.

step >

28

step >

Tech Zone

30

Replace the chip.

Repetitive Defect chart OPC Drum

75mm

Upper Fuser Film

57mm

Lower Pressure roller

56mm

Transfer roller

39mm

Magnetic roller

34mm

PCR

27mm

Running Test Pages Test pages must be run from the P1606 menu. Access the Printer Preferences menu, then Services, and Information pages. There are three test pages that can be selected. The Demo, Config, and Supply Status Page.

Running the Cleaning Page The cleaning page for these machines can only be run from the Printer menu. HP recommends that for best results, a transparency be used. If a transparency is not available, user copier grade paper with a smooth surface.

To run this page, Access the printer preferences. Click on Device Settings. In the cleaning Page area, press Start. The cleaning cycle takes up to 2 full minutes. The page will start and stop. Do not turn the printer off until the cleaning page has finished printing.

Mike Josiah Mike Josiah is the East Coast Technical Director at Uninet Imaging. A global distributor of toner, OPC drums, wiper blades and other supplies. An industry veteran since 1987, Mike is a member of ASTM committee F.05, the STMC Technician Certification Committee as well as an STMC trainer. He regularly contributes articles and teaches seminars at association meetings and trade shows.

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March 2011 | www.recyclingtimes.com.cn