*NEWS*THIN MARGINS ON COLOR PRINTERS

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*NEWS*THIN MARGINS ON COLOR PRINTERS

 user 2006-02-17 at 10:14:00 am Views: 82
  • #13956

    Thin margins on color printer
    Historically,
    printer manufacturers have looked to the color segment of the market
    for growth, and with good reason. While Hewlett-Packard Co. is the
    reigning king in the monochrome segment, color’s hierarchy is still
    undecided. Those who invest in companies that produce color page
    printers think the outlook is bright, because the printers use four
    times the toner-cyan, magenta, yellow and black-of a monochrome
    printer, thus painting a picture that is four times as brilliant as the
    current billion-dollar industry. But some manufacturers have been slow
    to jump into the color printer market.
    Until Lexmark introduced its
    C52X series, which included the C524n, last June, the manufacturer had
    a huge gap in its color lineup. The low-end C510 printed eight color
    and 30 monochrome pages per minute. The high-end C762 was significantly
    faster, but also more expensive. With nothing in between, competitors
    enjoyed the advantage.
    Lexmark’s new C524n rounds out the
    manufacturer’s color page printer assortment with a price point that
    seems unhealthily low but still provides a profit.
    This
    network-ready color laser printer offers 1,200 x 1,200-dpi resolution
    and brilliant color output at speeds up to 20 pages/minute. The C524n
    produces its first page in as little as 13 seconds and has a monthly
    maximum duty cycle of 65,000 pages.
    Its 437.5MHz processor and 128
    Mbytes of memory, the latter of which is expandable to 576, reduce the
    amount of time network users have to wait for print jobs. Color Care
    Technology and the Lexmark Coverage Estimator help manage the cost of
    using color toner.
    The C524n is 17.3 inches wide x 19 high x 20.2
    deep and weighs 57 pounds. It’s packaged with a power cable, a CD that
    includes the user guide and printer software, a paper-exit extension
    tray, setup sheet and toner cartridges for cyan, magenta, yellow and
    black. The C524n comes with a one-year on-site repair warranty.
    Many
    of us are aware of the lower manufacturing costs that result when IT
    and consumer electronics products are outsourced. But how razor thin
    must margins be for manufacturers to stay competitive in today’s
    printer market?
    Current Analysis Labs examined the C524n at a
    product volume of 120,000 units under the premise that the model was
    produced in China. To do that, we estimated the purchase costs of
    commodity components, manufacturing costs of fabricated components and
    location labor rates. The result was a production cost of $473.60 per
    unit. The electronics and assembly of the machine account for $107.10.
    The printer mechanism and its assembly account for $100.63.
    At the
    time of the product’s release, the suggested price was $699. With a
    production cost of $473.60 per unit (not accounting for tariffs and
    taxes), there is still profit to be made. However, Lexmark does not
    seem to care about profit margins on its hardware. To create buzz for
    the C524n, Lexmark discounted it by as much as 50 percent in some
    places. To maintain its revenue stream at the low price, Lexmark
    outfitted the printer with different toner cartridges. The
    more-expensive models, targeted at the enterprise segment, came with
    more toner. The less-expensive models, which the company saw as perfect
    for small-office and home-office users, came with low-yield cartridges.
    The
    Lexmark C524n was an important introduction. Whereas its predecessor,
    the C510, was ill-fitted to take share of the profitable color page
    printer market, the C524 series is perfectly positioned to compete.
    Lexmark claims the print quality of the C524 is “photorealistic”
    because of its new toner and printhead. The chemically processed,
    spherical toner delivers 1,200 x 1,200-dpi resolution, and the new
    printhead synchronizes four lasers in one unit with a mirror
    The
    C524n fronted Lexmark’s completely new C52X product line, leaving
    little for customers to ask for. The machines perfectly position
    Lexmark to attack the enterprise market as well as the manufacturer’s
    competitors, specifically HP