Makers of Computer Scanners Plan to Crack the Office Market

WHEN Larry Miller returned from a trade show the other day, he had 30 business cards he wanted to keep.Typing them into his computer would have been slow. So, Mr. Miller took a hand-held device made by his company, the Caere Corporation, passed it over the business cards, and voila! The computer had the information. That's what computer scanners are starting to do for American business. Anybody can put information into a computer almost as quickly as it can print it out. Scanner technology appears to have hit its stride in the United States after years of anticipation. "People have predicted 15 times in the last 10 years that it would take off," says David Nelson, vice president and imaging analyst for Shearson Lehman Brothers. Now, "the outlook is certainly improving." The market is growing 33 percent a year, says Kristy Holch, associate director of BIS Strategic Decisions Inc., a market-research and consulting firm in Norwell, Mass. In 1990, some 420,000 scanners were sold, according to BIS estimates. Annual sales will reach some 640,000 units this year and, by 1995, 1.8 million. Roughly three-quarters of the scanners sold are hand-held varieties. Users hold the device in one hand, like an oversized computer mouse, and pass it over a small piece of art work or text to get it into the computer. The other kind are flatbed scanners, which look like small copying machines. They work much the same way too. Like the copying machine, a scanner takes an image of a sheet of paper. Then, instead of printing that image onto another sheet of paper, the scanner sticks it into the computer. The problem with scanning has always been the next step. Until recently, computers could do very little with the scanned image unless they were huge systems with hefty $50,000-plus price tags. New and inexpensive software is changing that. Personal computers are pushing into the realm of sophisticated scanning. Graphics artists and newsletter publishers were among the first users of scanners. They discovered in the late 1980s that they could scan in a logo or a photo and use graphics-editing software to manipulate and place the image on a page. Since then, flatbed scanners have increased the quality of their resolution from 200 dots-per-inch to 800-dots-per-inch, and software has become easier to use. In the past year, color scanning has become popular thanks to the rapidly falling price of color scanners. Microtek Lab Inc. in Torrance, Calif., regarded as the world's leading color-scanning company, now sells its color scanner for $1,995 - about the same price that its gray-scale scanner sold a year and a half ago. The market for desktop-publishing is limited, however. If scanners are to become as popular as, say, fax machines, they will have to crack the office market, analysts agree. "The biggest opportunity for scanners is as an office automation tool," says Ms. Holch of BIS. "That's the application that can really take off." Much will depend on how far companies decide to move toward a technology known as document imaging. In the past few years, personal computers have been able to turn scanned images of text into actual letters and numbers that it can understand. The biggest drawback has been accuracy. Almost all the manufacturers of the special software that accomplishes the feat (known as optical character recognition or OCR) boast 99 percent accuracy or better. But 99 percent accuracy still means an average 10 errors on a typical 2,000-character page. There are other problems. Colored paper is more difficult to recognize accurately, as are tables of numbers. So, in the time it takes to correct all the mistakes, a speedy typist could have entered the information virtually flawlessly. As OCR improves, more companies will be tempted to move to scanners. The latest move comes from Hewlett-Packard Company, which plans to ship a new scanner called the ScanJet IIc on Sept. 3. The color scanner will use the company's new AccuPage technology, which the company claims will improve OCR. "We see OCR as being a big opportunity for growth," says Sue Arment, a Hewlett-Packard product manager. The AccuPage technology should allow scanners to recognize a wider range of documents, even those printed on colored paper or with coffee stains. "This market is growing rapidly and it's going to grow even more rapidly," adds Miller, Caere's vice president of marketing. The Los Gatos, Calif., company formed a partnership with Hewlett-Packard to develop the ScanJet IIc's OCR capability. It plans to announce next month a new version of its OCR software package that will take advantage of the AccuPage technology. Other OCR software manufacturers are expected to follow suit early next year, Ms. Arment says. "I think we're getting really close" to breaking into the office market, says Michelle Hammond, director of marketing communications for Microtek. "In the last two years we've really seen a big turn in terms of volume."