Implications of Electronic Mail and Message Systems for the U.S. Postal Service

Ch. 3-Market Penetration Model and Technology Assumptions .29

Table 6.-Assumptions About Rate of EMS Penetration (illustrative)

Early Generation II EMS (using current technology black
and white printers) for correspondence, bills, third-class
bulk mail:
Year of 5 percent penetration-1983
Year of 75 percent penetration-1996
Initial exponential growth rate (1983)-30 percent
Advanced Generation Ill EMS (using inexpensive home
hardcopy receiver) for nonhousehold to household bills and
statements:
Year of 5 percent penetration-1990
Year of 75 percent penetration-2010
Initial growth rate-20 percent
Advanced Generation II EMS (using high resolution color
printers) for advertising, greeting cards:
Year of 5 percent penetration-1995
Year of 75 percent penetration-2015
Initial growth rate (1995)-20 percent
Generation Ill EMS (using public and private message and
packet-switching networks, communicating word proces-
sors, computer networks) for intraoffice correspondence:
Year of 5 percent penetration-1983
Year of 75 percent penetration-1996
Initial growth rate (1983)-30 percent
for interoffice correspondence:
Year of 5 percent penetration-1984
Year of 75 percent penetration-2004
Initial growth rate (1984)-20 percent
Generation Ill EMS (using viewdata/teletext) for household
to household cards:
Year of 5 percent penetration-1985
Year of 75 percent penetration-2005
Initial growth rate-20 percent
SOURCE Office of Technology Assessment, see app A, table A4, for further details,
Generation II Growth and
Timing Estimates
The attractiveness of Generation II services
is determined primarily by the capabilities and
cost effectiveness of the devices for converting
the electronic signals back to hardcopy. De
vices that have black and white capability only
and limitations in page size and print style are
frequently not as attractive as conventional
ly printed material. Also, printing systems
must be very cost effective or EMS prices will
be too high to compete successfully with con
ventional mail.
For the purposes of this study, OTA as
sumed that the electronic printers available in
the 1980's will be limited in resolution and
flexibility and will lack color capabilities. Ad
vanced electronic printers, which are expected
to become available at cost effective prices in
the 1990's, will add greater resolution, grey

Advanced Generation Ill EMS (using home computer ter-
minals) for household to household correspondence:
Year of 5 percent penetration-1987
Year of 75 percent penetration-2007
Initial growth rate (1987)-20 percent
for nonhousehold to household correspondence and bulk
mail:
Year of 5 percent penetration-1987
Year of 75 percent penetration-1997
Initial growth rate (1987)-40 percent
Key technologies:
Home computers:
.500,000 installed (1980)
* Estimated by industry to grow to 4.5 million installed
by 1985 and 33 million by 1990 (roughly a 50 percent an-
nual growth rate).
Video computer games:
*Revenues increased from $308 million in 1978, to $968
million in 1979, to $2.8 billion in 1980 (roughly a 300 per-
cent annual growth rate).
Mini and small business computers:
* Revenues of about $9.4 billion worldwide (1980)
* Estimated by industry to continue to grow at 25 to 35
percent a year.
Computer software products:
* Revenues of about $1.5 billion (1980)
SEstimated by industry to grow at 30 percent annually
over the next 5 years.
Data communications:
* Estimated revenues of about $4 billion (1979) and grow-
ing at 30 to 35 percent a year.

scale, and color capabilities and probably will
include greater flexibility in materials han
dling. Recent technology and product an
nouncements suggest that advanced printers
may be available earlier than assumed for this
study.
Generation II EMS services using early elec
tronic printing capabilities, if priced competi
tively with mail service, could begin to find
substantial use by nonhousehold senders in
the next few years. For correspondence, bulk
statements, and other nonadvertising content,
OTA estimated a 5 percent diversion of exist
ing mail to Generation II EMS by 1983, with
a high initial rate of growth (30 percent) which
could lead to a 75 percent market share about
13 years thereafter, as summarized in table 6.
The use of Generation II for advertising pur
poses, however, is expected to be largely de
layed until color capabilities become available,
and even then growth will be slower to the ex

United States. Congress. Office of Technology Assessment. Implications of Electronic Mail and Message Systems for the U.S. Postal Service. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc39480/. Accessed October 25, 2014.