*NEWS*DELL: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. 

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July 26, 2006 at 11:25 AM