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 user 2007-04-25 at 11:16:00 am Views: 36
  • #18089

    New campaign in long-running ink wars
    Lexmark International announced its new lineup of wireless-enabled
    inkjet printers last week, it meant not only the addition of a line
    that could be pivotal to the company’s growth but also the expansion of
    a program that observers say intends to ward off competition from ink
    cartridge remanufacturers and refillers.All three wireless-enabled or
    optional printers, as well as two entry-level printers, will feature
    ink cartridges that are part of the Lexmark Return Program.The program,
    which Lexmark says is a way of offering more choice to consumers,
    offers customers $4 up-front discounts on the cartridges if they agree
    to mail them back to Lexmark and not get them refilled elsewhere.

    consumers have the return-program cartridges refilled and then attempt
    to reinsert them into the printer, a chip on the cartridges will
    disable them.The expansion of the program is the newest chapter in a
    long unfolding saga that pits printer makers against remanufacturers
    and refillers in a struggle for the lucrative ink market, the most
    profitable piece of the printer industry.Industry tracker Lyra Research
    estimated last fall that consumers would pay $32 billion for inkjet
    cartridges in 2006. Of that, remanufacturers and refillers were
    expected to have about 21 percent of the market.The availability of
    remanufactured cartridges has exploded in recent years, as franchises
    like Cartridge World expand rapidly, and top retailers like Staples,
    OfficeMax and Office Depot offer self-branded ink and toner. Walgreens
    has announced it plans to place in-store ink refill services at 1,500
    stores.When Lexmark announced the return program last September, it
    applied only to the Z845 single-function inkjet printer, a low-end
    device that sells for under $50.With the addition of the lineup of
    all-in-ones and single-function inkjets announced last week, the return
    program is now targeting customers who might not be as price sensitive
    as those who would have purchased the Z845.Larry Jamieson of Lyra
    Research said the program helps Lexmark lower its cost of printing,
    making it more competitive with rivals’ costs per page.It’s also, he
    said, another way to rebuff remanufacturers. He said he doubted Lexmark
    would actually remanufacture the cartridges and resell them.The program
    is similar to one offered for years on laser toner cartridges, which
    Lexmark does remanufacture.

    A remanufacturing group challenged the
    legality of that return program in a lawsuit in 2001. The Ninth Circuit
    Court of Appeals upheld the program in 2005.In other Lexmark news, the
    company was ranked No. 442 in the Fortune 500, which was announced last
    week. The company dipped from ranking 415 last year.It’s the
    fifth-largest Kentucky-based corporation on the list behind Humana
    (110), Ashland (248), Yum Brands (262), and Omnicare (353).