Office Machines
SIC 3579
NAICS 333313
The global office machine industry supplies numerous devices used in office settings. Major product classes include word processing equipment (except computers), typewriters, adding machines and calculators, postage meters, envelope sealers and openers, other mail-handling machines, and simple mechanical devices such as staplers and paper cutters. Two important categories of office machines excluded from the following discussion are computers and photocopiers, which are treated separately under Computers and Photographic Equipment and Supplies, respectively.
Overall growth in the office machines industry remained stagnant into the mid-2000s, due primarily to the effect of technological developments outside the industry. Just as photocopying rapidly supplanted mimeograph duplicating, computers have largely supplanted typewriters and word processors due to increased demand in the business community for Internet and network connectivity. Furthermore, recent years have witnessed massive growth in the market for multifunction office machines, which typically contain facsimile, printing, photocopying, and scanning capabilities in one concise unit, which is then connected to the computer network. Such multifunctional equipment had the lion's share of the U.S. market, with 68 percent, a figure that was projected to reach 74 percent by 2007, according to Euromonitor. From the point of view of office machines manufacturers, however, technological transformations are only problematic if the manufacturer is unable to diversify into the newer products.
The quick migration to such newer technologies has been most pronounced in leading markets such as the United States and Japan, while other nations still rely more heavily on older forms of office machines. According to Euromonitor, France was projected to have 39 percent industry growth into 2007, while Germany was expected to have 9 percent growth and the United Kingdom was expected to have 5 percent growth. The Asia Pacific region was another area expected to realize growth. According to the World Trade Organization (WTO), office and telecom equipment accounted for one-third to two-thirds of total exports in 2004 for five Asian economies, contributing significantly to the area's success.
According to Office Products International, consolidation was key for industry players to remain competitive in the mid-2000s. The high rate of acquisition activity that has characterized the office machines industry for years continues to make the industry's boundaries relatively ambiguous. Manufacturers of office machines and related parts and accessories typically are highly diversified firms with operations in a variety of industries. In particular, electronics and computer manufacturers tend to be among the leading producers of office machines, especially word processors and typewriters, the most prominent products in the industry. In most cases, general office machines accounted for a small portion of such firms' revenues.
In spite of slow growth overall, markets for typewriters remain strong in some countries, including India, Indonesia, China, Brazil, and Germany. The major suppliers of office machines in these regions, as well as in more mature markets like Japan, the United States, and the European Union, are primarily large, highly diversified international corporations involved in everything from camera production to superconductor technology to personal pagers to business consulting. In addition to these industry giants, smaller, more specialized domestic firms maintain a healthy position in localized and niche markets. Most of the major players conduct the bulk of their business through large retail dealerships like Staples and Office Depot, though many supplement this business with outlet establishments and mail-order services. Due in large part to the flat or declining demand for typewriters and word processors, many industry players have focused attention on customer service operations, which have become one of the primary selling points in a market that has seen its research and development investments re-appropriated to rival industries like personal computers.
Two associations served the industry in Europe. The European Association of Manufacturers of Business Machines and Data Processing Equipment (EUROBIT) was established in 1974 in Frankfurt, Germany, and represented nearly all of the region's manufacturers of business machines. The European Federation of Importers of Business Equipment (FEIM), headquartered in DeMeern, the Netherlands, was established in 1965.
The development of the typewriter was one of the most important and influential events in the office machines industry, as well as in the general business climate. The typewriter transformed the organization of offices in both public and private sectors, and was instrumental in adding to the number of office occupations, as well as the number of female secretaries, in the United States and Europe during the late nineteenth century. Moreover, typewriters played an important role in the development of other office machines. As typewriters facilitated the reorganization and systematization of the office climate and data records, typewriter manufacturers expanded operations to include data-processing equipment and other office appliances. Because research and development efforts were already geared toward office systems and needs, and because production methods were already in place to enable such diversification, these manufacturers used the massive profits derived from typewriter sales to manufacture this new equipment. In addition, these companies had already established a client base in the office products market and could easily offer new products to companies and individuals who took a liking to their typewriters.
During the late nineteenth century, there were approximately 20 significant typewriter-related innovations that preceded the commercialization of the typewriter in the 1870s. Most of these developments originated in the United States with the remainder in Europe. Working intensively between 1867 and 1873, Christopher Latham Sholes of Wisconsin developed the first commercially successful typewriter. Sholes' typewriter was manufactured by E. Remington and Sons of Ilion, New York, a producer of weaponry that had grown rapidly during the United States Civil War years. Seeking to diversify its production after the war, Remington sold several hundred typewriters during the first year of production, with prices ranging from US$25 to US$50.
A number of other firms began producing typewriters in the 1870s and 1880s, many of them with technical innovations. Most of the features associated with modern manual typewriters were available in the 1890s, including upper and lower case letters, a space bar, and "front-strike" technology, which enabled a typist to see what was being typed. The industry experienced rapid growth soon after its origins, and in 1886 a total of 50,000 typewriters were sold in the United States. In 1888, the Remington Standard Typewriter Company produced 18,000 typewriters and was still unable to keep up with demand.
A U.S. government survey estimated that there were 30 firms employing 1,735 workers in the U.S. typewriter industry during these early years. The rapid growth of the industry was predicated on manufacturers' development of a service and marketing apparatus to accommodate the complexity and relatively high cost (up to US$100 by 1890) of typewriters. The largest firms in the industry in 1905 were Remington (which became Remington Rand in the 1920s), Underwood, Royal, and L.C. Smith (which became Smith Corona in the...
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