*NEWS*XEROX’S NEW SOLID INK TECHNOLOGY
*NEWS*XEROX’S NEW SOLID INK TECHNOLOGY
2005-04-04 at 10:56:00 am #29190
Xerox Launches “Solid Ink” Strike in Color MFP
Color, color everywhere, but nary a drop of ink in the office. Until now, the
makers of color inkjet printers and MFPs have tried valiantly over the years to
penetrate corporate installations that use laser devices, but enterprise markets
have not adopted them enthusiastically. Why? Perhaps it is a penchant for what
is tried and true, a historical bias that inkjets cannot perform with the same
speed, quality and low cost that laser devices deliver. We would argue that it
is because the right value proposition has not been demonstrated.
How does a manufacturer change perceptions that have been ingrained over
time? By creating a value proposition so large that the impact left behind may
alter the landscape of the color MFP markets for years to come. The newly
released Xerox C2424 is that product and solid ink is the catalyst that powers
it. The C2424 will enter an uncontested space in the color MFP segment between
$1,000 and $4,500. Its closest competitors are the Canon MF8170c, C2500 and
C3500, none of which match up well in terms of price, speed and functionality
with the new C2424.
Inexpensive desktop inkjet models with low upfront capital costs and
correspondingly high running costs have been available for many years. These
products have worked well in the small office and home office (SOHO)
environments where page volumes are low and the total cost of ownership (TCO) is
not a concern. At the other end of the spectrum, workgroup/departmental color
MFPs with powerful copier engines have been characterized by extremely high
capital costs (ten to 100 times those of their inkjet equivalents), yet low
running and subsequent TCOs, when they produce significant monthly page volumes.
However, a gaping hole has existed in the low- to mid-volume workgroup color
MFP space. The market has been waiting for a color MFP that blends accessible
capital costs with running costs that are on par with those of
departmental/workgroup MFPs. Last year, Canon attempted to fill the space with
the first $1000 desktop color laser MFP targeted at the small and medium
business (SMB) and SOHO markets. However, the gap between $1,000 and $5,000
machines remained. The Xerox C2424 is a landmark product priced between $2999
and $4399 (depending on configuration), which will fill that gap. The C2424 will
provide new opportunities for small and midsized workgroups looking for high
speed, high quality color output with relatively low capital costs.
The Xerox C2424 will come in three versions: the WorkCentre C2424DN, the
WorkCentre C2424DP and the WorkCentre C2424DX. The $2999 base model is designed
for the desktop and comes with 256MB of RAM standard, 300×300 scan resolution
and a maximum sheet capacity of 625. The C2424DN model adds an additional
525-sheet feeder, a storage cart, 600×600 scan resolution and an additional
256MB of RAM for a price of $3799. The $4399 top level DP configuration offers
the previously mentioned features and a ScanSoft software bundle that includes
PaperPort Pro 12.0, OmniPage Pro 12.0 and Image Retriever. The software bundle
provides optical character recognition (OCR) and scan-to-file capability,
features that are usually reserved for high-end departmental MFPs. The C2424 is
capable of scanning at 20 pages per a minute and is rated at 24 page per a
minute (ppm) for both black and color. The first copy out time is a speedy 15
seconds, however, the nature of solid ink requires that the machine be warmed up
each day or left on.
Competitive Models in the Marketplace:
The Xerox C2424 is a perfect “tweener” for the workgroup segment. It is a
compact, affordable model with high-end functionality and print speeds that will
adequately support mid-size workgroups.
The Canon MF8170C color laser MFP is better suited for small office
environments with occasional color requirements even though it lacks network
scanning, duplex printing and the speed to adequately service the workgroup
environments. The functionality of both the Canon C2500 and C3500 color laser
MFPs is closer to that of the C2424 series, but the Canon machines are
significantly more expensive and have bulkier, modular designs that take up more
space than the integrated, space-saving C2424. Despite the impressive scan-to
functionality and 2,000-e-mail address books of the C2500 and C3500, the C2424
trumps the two machines in terms of standard memory and print speed.
The Lexmark X762e color laser MFP is also a modular device that comes at a
higher price point than the C2424. The C2424’s 85,000-sheet monthly duty cycle
is comparable to the X762e’s 100,000. Further, the two machines’ paper
capacities and memory seem in line. However, the C2424 does not offer fax
functionality, a drawback when it is compared to the fax-ready X762e. SMB
verticals with high color volume and fax requirements will have to look
down-market to the MF8170C or up-market to the X762e, depending on their
document management requirements.
The C2424’s solid ink technology promotes ease of use and efficiency as
customers can replace ink sticks while the machine is in use. Solid ink printing
is also environmentally friendly, a fact that will be particularly attractive to
“green” consumers in Europe. In terms of graphics, solid ink will produce images
that are among the most vivid in the workgroup segment. The images will not be
durable or sharp enough to frame on your office wall, but the technology is
ideal for producing colorful marketing and advertising collateral for
short-term, disposable use.
The C2424 will create new markets of opportunity for Xerox, specifically in
vertical markets like real estate, retail and finance where SMBs with high color
volume requirements are prevalent. These segments will be able to utilize solid
ink’s traditionally glossy, color-rich images in marketing materials, pamphlets
and brochures. However, by entering the $1,000 to $4,500 workgroup space with a
color MFP that offers 24 ppm mono/color speeds and network scanning, Xerox will
unwittingly create fallout.
First, traditional workgroup and departmental MFP vendors such as Canon,
Ricoh, Toshiba, Sharp and Konica Minolta will not stand idly by. Instead, they
will put increased pressure on the lower-end workgroup market with competitive
Second, color laser printer manufacturers such as Kyocera Mita, Okidata,
Lexmark, Brother, Epson, HP and Dell are hungrily eyeing this space and are
likely to move up market by offering MFPs based on color laser print engines.
Third, these future offerings will likely offer speeds that are equal to or
higher than the current 24-ppm milestone set by Xerox.
Fourth, eventual competitors of the C2424 will feature lower price points and
superior feature sets, diminishing differentiation between mid-workgroup and
The final and most important ramification of the ground-breaking C2424 will
be that workgroup models and high-end departmental color MFPs will cannibalize
each other’s sales once end users warm up to the new mid-workgroup segment.
High-end color MFP devices are high revenue and high profit devices;
cannibalization of departmental color MFP unit sales to newer low cost
mid-workgroup products will lower profits and revenue as overall unit volumes
Are the potential consequences listed above indicative of a future with
falling average selling prices, revenue and net profits? Not necessarily.
Initially, low hardware price points and equivalent running costs will increase
demand for the mid-workgroup color MFP space. Decreasing hardware prices will
lead to share gains for color MFPs, and manufacturers will benefit from color
supplies revenues that are on average four times those of black-and-white
The challenge will come when the market becomes overcrowded. Success will
depend on how well manufacturers differentiate and segment markets with their
disparate product lines, and how their products are perceived by the end user.
In the near term, the C2424 will be a boon for Xerox as its two-tier and dealer
distribution will provide easy access, and its high cost-benefit ratio will
provide significant value to end users. In five years, we may look back and say
the launch of the C2424 signified the beginning of intense competition between
low, mid-workgroup MFPs and departmental MFPs and the subsequent decline of
revenue and profit for the MFP category.