*NEWS*BEST BUY DROPS LEXMARK PRINTERS !

[Anonymous]

Best Buy drops Lexmark printers
‘Disturbing sign for the future of inkjet’
Best
Buy is no longer selling Lexmark printers in its 1,200-plus stores,
dealing a blow, some say, to the Lexington-based company’s plan to
revive its struggling inkjet brand by focusing on tech-savvy people who
print more.Lexmark has prominently pushed its lineup of wireless inkjet
printers at stores, trying to shed its dependence on low-end printers
whose owners don’t use enough ink — a printer company’s key profit
driver.”It’s a disturbing sign for the future of inkjet,” said Tom
Carpenter, vice president and senior equity analyst at Hilliard Lyons
in Louisville, noting the company also has a limited presence in
Staples stores.Lexmark has boasted in recent months about the
popularity of its wireless inkjet printers, telling investors it held
30 percent of the domestic market for the products in December.”If
you’re doing as well in wireless as Lexmark claims, it’s kind of
surprising that Best Buy would not want to carry your products,”
Carpenter said. “Part of it is they might be able to see that Lexmark’s
inkjet business might not be around in a couple of years, and they
prefer to work with other manufacturers that are going to be
around.”Lexmark’s inkjet printer division has struggled since the
latter half of 2005. To adjust to its shrinking demand, the company has
shuttered plants and eliminated or shuffled thousands of employees
worldwide.

In 2006, it began producing 20 percent fewer inkjet
printers, mostly low-end products that were sometimes given away for
free as part of bundles. Late last year, it announced a second
restructuring, saying it would cut an additional 30 percent of inkjet
shipments and tailor its marketing to customers who print
more.Carpenter said some of those consumers who would print a lot of
pages would likely shop at Best Buy.”The person that shops at Best Buy
is generally going to be more tech-savvy than a person that buys at
Wal-Mart who is more concerned about price,” he said.Best Buy still
sells seven Lexmark printers on its Web site, though they are clearly
marked as online-only buys. The stores, including the chain’s two in
Lexington, continue to stock a wide variety of Lexmark ink cartridges.A
Best Buy spokesman did not return a call to discuss the chain’s
decision. Lexmark is in a so-called “quiet period” before Tuesday’s
announcement of its first-quarter earnings and declined to discuss Best
Buy’s decision.And even though Lexmark printers are gone, Best Buy is
selling at least one Dell-branded inkjet printer in some stores. Many
of Dell’s printers are manufactured by Lexmark and then sold under the
Dell brand.

Larry Jamieson of industry tracker Lyra Research
downplayed the significance of Best Buy’s decision.Jamieson said
Lexmark is better off looking for customers at office superstores such
as Staples and OfficeMax, where people may use the inkjet printers at
businesses and be more likely to print a lot.”I don’t think they’re
happy about it,” he said of Lexmark on Best Buy’s move. “You want to be
everywhere that people want to buy products, but the demographic of the
people in Best Buy are kind of some of the people Lexmark wanted to get
away from, anyway.”

And as another analyst noted, Lexmark
printers could be back in Best Buys within a few months.”It usually
takes six months for a change …” Shannon Cross of Cross Research
wrote in a note to clients of her market research firm. She added that
Lexmark’s newest inkjets could be back on the shelves as early as
back-to-school shopping time.”However, this is the first time we can
remember that Lexmark has not been represented on Best Buy shelves,”
she wrote.

[Author]

April 21, 2008 at 1:10 PM