LEXMARK FARES WELL IN DIFFICULT MARKET

[Anonymous]

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Lexmark’s printers fare well in difficult market
COMPANY SEES RISE IN INKJET, LASER SALES
U.S.
shipments of printers and copiers fell by 14 percent in the fourth
quarter of 2006, compared to a year earlier, driven primarily by a
decline in sales of single-function inkjets, according to a Gartner
Inc., report.The research firm’s findings, though, did include some
positive news for Lexington-based Lexmark International, which saw its
shipments increase in all-in-one inkjets as well as monochrome and
color laser printers.The major drop in shipments stemmed from a 23
percent drop year-over-year in single-function inkjets, wrote authors
Camille Iorns and Don Dixon.”The shift to online and retail photo
printing is happening quickly, and this market is suffering as a
result,” Iorns wrote.

The report notes that 36 percent of digital images are printed at home now, compared to about 50 percent in 2005.Also
contributing to the single-function inkjet decline is an unwillingness
on the part of printer manufacturers and vendors to bundle the devices
as a promotion in stores.In early 2006, Lexmark executives announced
the company would be exiting about 20 percent of its inkjet business, a
group that included bundling agreements that often saw retailers give
away the printer. Consumers tended not to purchase enough ink over time
to meet the company’s profit expectations.”When you give stuff away for
free in bundles, oftentimes they don’t get used,” Lexmark Executive
Vice President Paul Rooke told an attendee at a recent investor
conference. “They get put in a closet, handed down to somebody or
thrown out.”The Gartner Inc. report shows that Lexmark’s share of the
single-function inkjet shipments dropped by about half in the fourth
quarter of 2006 compared to the same period a year earlier.The company
has continued to do bundles that make financial sense, executives say,
such as some bundles for all-in-one printers, which see more ink usage
because of added functions like copying and scanning.

Lexmark’s
growth in the all-in-one market was noted in the report, which stated
the company’s shipments increased in the single-digit percentage range.The
company did not grow as much as industry leaders Hewlett-Packard or
Canon, but it did improve whereas other brands such as Dell and Epson
lost ground year-over-year.In the monolaser category (capped at devices
that print up to 69 pages a minute), shipments increased 4 percent
year-over-year, according to Gartner.Lexmark’s shipments grew 22
percent, however, “in part because of a very strong new E series
product line,” the authors wrote.

As for competitors, HP was up slightly — about 2 percent — while Dell fell 12 percent.
The
research firm also cited Lexmark’s efforts in the color laser category
(capped at devices that print up to 40 pages a minute).Lexmark’s
shipments increased by 20 percent year-over-year “because of strong
product introductions” in the second half of last year, according to
the report.The growth rate of the category as a whole, though,
slackened to 2 percent year-over-year.

In other Lexmark news:
•
The company is teaming with a reseller of its products to encourage
Kentucky government employees to think environmentally friendly
throughout April.A $50 contribution will be given to an environmental
group for every Lexmark duplex printer — those that print on both
sides of a page — sold through Pomeroy IT Solutions’ contract with the
state.The contract exclusively provides Lexmark printers to the state,
as well as gives local governments, public schools and state colleges
and universities the option to buy printers under the contract’s
pricing.Almost 40 models of the company’s inkjet, laser and
multi-function printers come with duplexing standard, according to a
company news release.The program is being launched to commemorate Earth
Day, which is April 22.The contributions from the companies, both of
which are based in Kentucky, will be made to the Kentucky Natural Lands
Trust.The organization is a Berea-based conservation group that has
purchased and preserved land throughout the Commonwealth.
• Lexmark
hosted a foreign press event last week at its Lexington
headquarters.Noted in the discussion was that the company will roll out
its Lexmark Fleet Manager system to non-U.S. markets beginning later
this year.The Fleet Manager is a program that allows resellers of
printer hardware and services to track printer fleets for businesses,
checking on things like toner usage, error messages and more.Lexmark
waived the initial fees for the service in the United States, banking
on the belief that if the program is embraced, it will drive sales of
Lexmark hardware and supplies.A more datailed timeline on the release
of the product outside of the United States and its specific fees is
still being completed. 

[Author]

April 3, 2007 at 10:38 AM