DELL JAPAN:STARTS PRINTER PRICE WARS….?

[Anonymous]

Canon Shares Drop as Dell Japan May Start Price War
July
06 — Shares of Canon Inc., Japan’s second- biggest seller of color
laser printers, slid after Dell Inc. said it started selling a rival
machine aimed at office users in Japan and may lure customers by
cutting prices.
Canon dropped 200 yen, or 3.6 percent,
to 5,290 at the 3 p.m. close in Tokyo, after earlier falling as much as
4.2 percent.“Canon and other Japanese printer manufacturers cannot
ignore the pressure on prices and market share,” said Mitsuhiro Osawa,
an analyst at Mizuho Investors Securities Co., who rates Canon
outperform.”Dell, the world’s largest personal-computer maker, today
started selling a printer in Japan that can produce 17 pages a minute
in color and 30 pages a minute in black and white. The printer will be
priced at 89,800 yen ($768), said Makoto Kure, a Dell Japan Inc.
spokesman. He said Round Rock, Texas-based Dell may cut that
price.Canon’s LBP 5500 Hybrid Laser Printer can produce 17 pages per
minute in color and monochrome and retails for 248,000 yen, according
to the company’s Web site.Operating profit at Canon’s office equipment
unit, which includes printers and copiers, rose 8.1 percent to 152.2
billion yen in the January through March quarter. The unit accounts for
70 percent of the company’s sales.

Printer Makers
Shares
of Seiko Epson Corp., the No. 1 color laser seller in Japan, dropped
130 yen, or 4.6 percent, to 2,685, their worst performance since Jan.
30.The negative impact may be felt more for Epson than Canon, because
Epson has a higher share of the laser printer market,” said Tetsuya
Wadaki, a Tokyo-based analyst at Nomura Holdings Inc. who rates Canon
“buy.” He said the effect would not be that big for either company,
because Dell isn’t likely to grab a big share of the market.“Dell was
only able to garner at most a 14 percent market share in the U.S. laser
printer market, so I don’t think they will be much of a threat in
Japan,” Wadaki said.Dell entered the Japanese personal computer market
in 1993, triggering price competition that has brought prices down at
an annual rate of 10 percent, the Nihon Keizai newspaper reported
earlier today.The company may have a tough time taking market share
from Canon and Seiko Epson, judging from the difficulties it has had
against rivals in the U.S., said Keisuke Shirasuka, who manages about
$600 million for Mitsubishi UFJ Asset Management Co. in Tokyo.

U.S. Performance
Hewlett
Packard has been competing favorably with Dell in the U.S., so it seems
like today’s reaction in share prices is more to the news than the
substance,” said Shirasuka.Canon shares have tumbled 9 percent over
the past four trading sessions, erasing 693 billion yen in shareholder
wealth.Other Japanese printer makers’ shares also declined. Ricoh Co.,
Japan’s third-biggest laser printer manufacturer, fell 60 yen, or 2.6
percent, to 2,240. NEC Corp., the fifth largest, lost 23 yen, or 4.1
percent, to 545, its lowest close since June 2003.Seiko Epson and Canon
each had 24 percent of Japan’s color laser printer market in 2005,
according to researcher Gartner Inc. Ricoh Co. had 20 percent, Fuji
Xerox Co. 12 percent and NEC Corp., 6 percent, Gartner said.

[Author]

July 26, 2006 at 11:27 AM