If the office technology industry was a romance novel set in 17th-century England, Kyocera Document Solutions America (KDA) would never be considered the rakehell. The OEM simply doesn’t have a scoundrel-esque bone in its body. The company is consistent, dependable and predictable, none of which would cause fair maidens to breathlessly fan themselves. Sadly, Kyocera is the dowdy, safe pick that always gets left high and dry at the conclusion of Hallmark Channel holiday movies.
In business, being safe and consistent sets a profitable pace that, while lacking the excitement of a boldly innovative company, pays the bills and maintains business. But Kyocera President and CEO Oscar Sanchez, while allowing that the firm can be considered a bit “boring,” believes his company has a swashbuckling, adventuresome tendency aching to come out. While “Kyocera the Disruptor” remains to be seen, Sanchez is confident the manufacturer has all the ingredients to garner a larger share of the market pie.
Any why not? Keypoint Intelligence has vouched for its A3 virtuosity and overall excellence, courtesy of a dozen Buyers Lab awards. Kyocera manufactures virtually everything it sells, including the hardware. It dove headfirst into the cloud for document and print management, opening a new world for its dealers. Its parent company, Kycoera Corp., manufactures critical components for the semiconductor industry that are also baked into many artificial intelligence applications. KDA is also eating its own food, test-driving AI-addled applications to provide skeptical dealer partners with bona fide use cases as to how it can enhance day-to-day operations.
So while Kyocera may not get the girl in the end, its future promises more than a little excitement. Sanchez sat down with ENX Magazine to outline his vision for a bolder Kyocera.
2023 proved to be a challenging year for many manufacturers. How did Kyocera fare in the U.S., and what were some of the variables that played a role in shaping the year?
Sanchez: The three years before 2023 were quite difficult because many things were going on—COVID in 2020, supply chain issues in 2021 and then the delivery of all the backorders in 2022. For those three years, the results were totally upside down. Really, 2023 has been the first normal year since then. For our purposes, we compare the results in 2023 with those in 2019, as it was the last normal year. Our 2023 revenue was higher than 2019, [even though] the number of units we’re selling in the U.S. market has decreased in total. We’re happy to see that our revenue is increasing. If you look at the IDC data, it points out that we were the OEM with the best performance in terms of market increase in A3, A4 and printers, the three markets we’re in. The main driver of those results was our dealers; 78% of them increased their revenue year over year.
Is the dealer success a product of end-users being able to increase their technology spend?
Sanchez: I think it’s probably a mix of reasons. Just as it was for us, 2023 presented a great opportunity for the dealers to refocus on their businesses and not manage external problems such as the lack of inventory from the previous two years. They’d been through a lot during those two previous years. And while 2023 started slow, once dealers depleted their inventory, demand was strong. That’s why I think, in general, the results were really good.
Kyocera is celebrating 50 years of doing business in the U.S., and the company has gone through several transformations during that time. What’s been the common denominator that’s sustained it, and how do you shape its future?
Sanchez: Fifty years is a long time, so we’re very lucky to celebrate that milestone. Kyocera has gone through a lot during that time, from the financial crisis in 2008 to COVID. The company was established as Mita in 1973. Unfortunately, the company filed for Chapter 11 in 1998 and Kyocera took over. We transitioned from being just a copier manufacturer to being a copier and printer manufacturer. We’ve had a diverse set of presidents over the years: American, Japanese and now European. I think that’s also created a lot of changes in the company. Despite all those disruptions, the company has managed to grow year after year with solid profits. We’ve been predictable; some may even say boring. But you know what to expect from us. We probably haven’t been the most aggressive or disruptive OEM. We haven’t done any major acquisitions. Still, I think we’ve always been reliable and trustworthy. I think that’s probably the common denominator that I’ve seen in our 50-year history.
My mission now as president is to leverage that strong foundation, that heritage of stability, and try to achieve a more relevant position in the market. I think we have the resources, financial strength, human capital and technology to become a much stronger player in the industry.
— Oscar Sanchez, Kyocera
Does Kyocera have the potential to be more of a disrupter in the future?
Sanchez: My mission now as president is to leverage that strong foundation, that heritage of stability, and try to achieve a more relevant position in the market. I think we have the resources, financial strength, human capital and technology to become a much stronger player in the industry. We’re looking to become more aggressive in terms of trying to pursue growth at a higher pace than before. Top-line growth isn’t our philosophy; profitability has always been important to us. We have a strong foundation, but we need to be more aggressive. We need to challenge the status quo.
Keypoint Intelligence recognized Kyocera with a dozen Buyers Lab awards, including A3 Line of the Year. What’s the secret sauce behind the strength and consistency of your A3 line?
Sanchez: Kyocera Corporation, our mother company, has a strong reputation as a manufacturer of critical components used in satellites, smartphones, vehicles and now in many AI components for the semiconductor industry. I think the strong focus our company always had in improved quality, reliability and innovation was brought into document solutions. I think that was the major advantage we had when we were acquired by Kyocera. That’s why, in my opinion, we now have the best product lineup in the industry. The reliability of our hardware and the experience of being a strong manufacturer of key components is helping us develop our document solutions lineup.
What stand out as some of the watershed moments for Kyocera over the past 12 months? What resonated the most with you?
Sanchez: When I joined Kyocera America almost six years ago, I made many changes in our programs, pricing, policies and executive team. That wasn’t easy; change is always difficult, and I was the new president coming from Europe. I was an unknown in the U.S. channel, and I was being compared with other executives who were popular and boasted a legacy in the industry. At the same time we were introducing all the changes, we had so many disruptions in the industry. That created a difficult situation the last few years. But in 2023, I can say that everything set up nicely from my perspective. Our plan is well understood by the dealers now, and I think it’s appreciated. I think the results prove it. Kyocera is a dealer-oriented company in Europe and in the U.S. The performance and the satisfaction of our dealers is what’s really going to drive the company. If I had to choose the top outcomes from last year, it’s the financial performance, the level of satisfaction and the connection with our dealer channel that were most satisfying.
Earlier this year, Kyocera announced the release of the Cloud Information Manager. How’s it been received by dealers thus far? Talk about this important step into cloud document management.
Sanchez: We launched Kyocera Cloud Print and Scan (KCPS) for print management, cost control and security. We followed it up with the launch of Kyocera Cloud Information Manager (KCIM), which is our first homegrown document management solution. This shows the direction that Kyocera is taking in terms of revenue diversification through software. First, we believe that, apart from having a few strong alliances with third-party software companies, we needed to develop our own solutions to better control the development roadmap, pricing and integration with our products. Second, we believe all that new technology has to be cloud based. I think KCIM and KCPS speak directly to that. In terms of the reaction from the channel, it’s been gradually and slowly enthusiastic. Those who know me know that I’m very transparent and candid; I’m not going to tell you we’ve obtained massive revenue from these products so far, because it’s not true. But we’re absolutely convinced that these two products will be a great addition to any dealer’s product offering.
With KCIM, our dealers can offer customers a full document management solution free of charge, with full functionality to manage up to one gigabyte of information. After that, the customer can decide if the product meets expectations. They can get a subscription for $60 per month MSRP to keep on using the product. This is a very attractive approach for the dealers because they can get into document management with no risk and no upfront investment for a cloud-based solution that doesn’t require any technical expertise. As dealers are gradually understanding the benefits of the products, they’re getting more and more confident in them. I think it will become one of our main revenue drivers. I was in a roundtable two months ago with our dealers, and one of our longtime resellers said, “Oscar, the best product Kyocera launched has to be KCPS.” That was a bold statement coming from a dealer who’s been selling copiers and printers for a long time. I think that sentiment is permeating in the channel more and more.
What innovations can we expect to see during the coming year, and what’s been the messaging you’ve shared with your dealer partners?
Sanchez: Right now, we’re in the middle of [international print show] drupa, and we’re presenting different products. Inkjet technology has become our biggest innovation in the last few years. In this fiscal year, we’re going to launch a new product in our production inkjet line that will address the needs of graphics arts and high-quality finishing, needs for which we currently don’t have a product. We’re going to launch an inkjet textile printer that will probably not be sold by the majority of our dealers. I think this shows how much we’re investing not only in toner technology but also in inkjet. In the more traditional dealer space, we’re going to roll out a new family of high-speed A3 office devices up to 105 pages per minute, which will be the highest speed ever for Kyocera in the office environment.
I think many dealers have discovered Kyocera has a really great product lineup and is a viable alternative. We’ve been successful in recruiting some significant dealers, so we’re really expanding our network to ensure we have enough market coverage.
— Oscar Sanchez, Kyocera
In terms of messaging, Kyocera remains one of the few OEMs that manufactures all its own A3s, A4s and inkjet devices. We see some OEMs that aren’t focusing on all the lines because it’s difficult to maintain the investments in R&D. Kyocera is the sole manufacturer of all our products. That means we control the roadmap, and I think that will make our product lineup, both in hardware and software, really strong.
Talk a little about the role AI will play in future Kyocera technologies.
Sanchez: I think artificial intelligence will be the key component of any future technology, and we’re gradually incorporating it in our products. We’ve already seen some applications that have improved product reliability, security and the ease of maintenance. At the same time, this year we’ll implement AI components in our operations that impact the way we run our business. The intention is to share this experience with dealers to help them understand how AI can help them become more efficient and generate cost savings. Everyone understands the importance of AI; we don’t need to convince anyone of it. But when I talk to dealers, many of them struggle to find specific use cases and success stories on how to practically use AI in their day-to-day operations. So I believe our responsibility as OEMs goes beyond delivering good products. We’ll try to help dealers understand specific case uses we discovered through our own experiences.
What will be the keys to Kyocera garnering a greater market share moving forward?
Sanchez: Step one is to have a strong line of products, and we check off that box. We see some OEMs abandoning their manufacturing lines and outsourcing those products. Kyocera remains committed to controlling technology and manufacturing, and I think that will pay dividends. The second aspect is you must have attractive products to make dealers competitive. Our dealers need to have the tools to fight for new customers. Finally, perhaps the most important one, is that you need to have the trust of your dealers. I think it’s important they have trust in our direction, decisions, ethics, the way we do business and our moral compass. In combining those three elements, I think we’ll see a significant increase in our market presence. I know this answer sounds simple, but the role of a leader is to simplify the complicated and not complicate what’s simple.
Do you see a potential for growing your dealer list either marginally or substantially?
Sanchez: The last few years have been extremely successful from a recruiting point of view. I think many dealers have discovered Kyocera has a really great product lineup and is a viable alternative. We’ve been successful in recruiting some significant dealers, so we’re really expanding our network to ensure we have enough market coverage. It’s a situation in which many things are going on in the industry with OEMs. And I think the current situation probably represents a great opportunity for Kyocera.
Is there anything on the horizon from a program or partnership standpoint?
Sanchez: Not from the manufacturing point of view; we’re very stable there. We’re always revisiting our programs to make sure they help make our dealers more competitive. In April, we launched a new printer program because we see a big shift from A3 to A4. We want to help dealers be successful in that segment. The most important thing we have on the horizon is the next dealer conference, which will take place in May or June of 2025. It’s an important event that requires a lot of preparation. We’re working to make the conference a showcase about technology programs and our vision for the future.
What will a successful fiscal year 2024 look like in your estimation?
Sanchez: We just started our fiscal year in May. Obviously, the revenue component is very important. We’re very ambitious, targeting double-digit revenue growth. That’s challenging in this current market, but we have the potential to do it. From a revenue standpoint, that’s what success will look like. As for other factors, we have a solid position with our copier and printer lines, and we want to continue doing well there. We’re also eager to penetrate the dealer channel with our software products. We’ve had great success with the introduction of the inkjet production line and IT software products that have been developed for us, and we know there will be more coming up in the near future. It’s critical to help dealers transition into software.
We’re losing revenue from click volumes because we know that the volumes have been declining. I think the cloud-based products help us bring recurring revenue to the dealers, and that’s what they’re seeking. It’s vital to not only sustain our goals, but help dealers succeed as well. We’re excited about what the future holds for Kyocera.
