*NEWS*IBM-RICOH EXEC. REASSURE LEXMARK

  • cartridgewebsite-com-big-banner-02-09-07-2016
  • futor_902x177v7-tonernew
  • facebook-tonernews-12-08-2016
  • 2toner1-2
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • 161213_banner_futorag_902x177px
  • Print
  • big-banner-ad_2-sean
  • toner-news-big-banner-nov-8
  • 4toner4
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • 536716a_green_sweep_web_banner_902x17712
Share

*NEWS*IBM-RICOH EXEC. REASSURE LEXMARK

 user 2007-01-30 at 10:18:00 am Views: 52
  • #17132

    IBM-Ricoh executives reassure Lexmark
    NEW FIRM TO KEEP, EXPAND PARTNERSHIP
    Executives
    of a new printing company formed by IBM Corp. and Ricoh Co. told
    analysts yesterday they plan not only to keep IBM’s partnership with
    Lexmark but also to expand it.The remarks capped a day of theorizing on
    how the joint venture could affect the relationship between IBM and
    Lexmark, which manufactures some printers sold under the IBM brand and
    was an IBM holding until it was spun off in 1991.Before a call with
    analysts affirming Lexmark’s role in the new company, analysts had
    cautioned that Lexmark-made printers could be phased out by Ricoh,
    reducing Lexmark’s annual revenue by 2 percent to 5 percent.The
    questions stemmed from a deal announced Thursday in which IBM said it
    would spin off its Printing Systems Division into a new company, the
    majority of which would be owned by Ricoh, a Japanese firm specializing
    in printers, copiers and other equipment.Under the proposed deal, Ricoh
    would hold a 51 percent stake of the newly named InfoPrint Solutions
    Co., while IBM holds the remaining 49 percent. Over the next three
    years, Ricoh will acquire the remainder of IBM’s stake.Ricoh will pay
    IBM $725 million upfront and make another payment at the end of the
    three-year period, according to the companies.InfoPrint Solutions Co.
    will start with about 1,200 employees and be located in Boulder, Colo.
    In another example of the companies’ ties, Lexmark leases space from
    IBM in Boulder.After the deal was announced, analysts said it could
    have meant the end of Lexmark’s printer production for IBM, which is
    thought to consist of workgroup monolasers and some laser
    multi-function printers, said Larry Jamieson of industry tracker Lyra
    Research.But Ricoh spokesman Russell Marchetta confirmed yesterday that
    IBM’s relationship with Lexmark “will continue.”"We’re moving forward
    with all of our partners,” he said.Lexmark declined to comment on the
    joint venture, following its general view of not discussing customers,
    including IBM and Dell, that buy printers from Lexmark and then sell
    them under their own brands.
    IBM and Ricoh executives told analysts
    they had personally contacted executives at Lexmark and discussed the
    new company, said Lyra Research Senior Analyst Steve Reynolds, who
    listened to the call.”(They) said that at minimum, ‘We’ll continue as
    we have.’ And I’m told their long-term goal is an even stronger
    relationship with Lexmark than they have now,” Reynolds said.”I’m
    somewhat surprised,” Reynolds continued. “I’m not sure how an expanded
    relationship could really occur.”Reynolds explained that Ricoh uses a
    number of suppliers, including Samsung and Panasonic, for its existing
    printer business, while IBM relies quite strongly on Lexmark.”Maybe I
    haven’t had a chance to think it through,” Reynolds said immediately
    after the call. “But I cannot imagine how (an expanded relationship)
    can be the case when Lexmark is going from being a primary vendor to
    one among many.”Philip Grote, a printer industry analyst with Current
    Analysis, said the move could be beneficial to Lexmark, though, because
    the joint venture is exclusively focused on printing, whereas IBM has a
    number of businesses.”Greater focus means more revenue, and Ricoh and
    IBM and Lexmark will get a share of that,” Grote said.Before yesterday
    afternoon’s analyst call, Jamieson, of Lyra Research, said he would not
    have been surprised if Ricoh began using its own printers in place of
    those made by Lexmark. But he emphasized that some IBM customers would
    continue to need Lexmark-made printers because of legacy software
    systems, so no phasing out would have been immediate.Regardless of what
    happens, several analysts concurred it would not be a huge financial
    blow to Lexmark had InfoPrint Solutions Co. stopped its orders.The
    amount of sales to IBM, which are not disclosed by Lexmark, were
    estimated by analysts to be as low as 2 percent of annual revenues and
    no more than 5 percent — a range of about $104 million to $261 million
    based on 2005 revenue of $5.22 billion.The IBM printing business,
    meanwhile, generated about $1 billion in revenue in 2006, according to
    IBM and Ricoh.