REMEMBER LEXMARK ?

[Anonymous]

http://brainstormtech.blogs.fortune.cnn.com/2009/09/01/remember-lexmark-the-printer-underdog-is-still-fighting/?section=magazines_fortune
Remember Lexmark?
In
this era of Kindle books, text messages and Facebook photos, printed
information is taking it on the chin – and perhaps no company has been
hit harder than Lexmark. The Kentucky-based printer company is one of
the worst performing stocks in the hardware sector this year, down
about 30%.But Lexmark (LXK) CEO Paul Curlander hopes a new line of
printers will help him climb off the canvas.The eight new machines for
small and medium-sized businesses, which Lexmark is launching today,
sport eco-friendly features designed to conserve paper and ink. Some
have touchscreens. And they should get more attention than usual,
thanks to expanded distribution deals Lexmark signed earlier this year
with retailers like Staples (SPLS), Office Depot (ODP) and OfficeMax
(OMX).“We’re trying to make inkjet a bigger piece of the business
market,” Curlander tells Fortune. “We want to move down from the
enterprise space into small and medium business, and get device prices
down into the $199 to $399 range.”

Even with these fresh
products, Curlander is in for a bruising battle. Last year Lexmark’s
nemesis, printing giant Hewlett-Packard (HPQ), shipped about six times
more inkjet printers, and nine times more laser printers.Under the
unique economics of the printing business, that size difference can be
particularly significant. Companies like HP and Lexmark often sell
printers at a loss, expecting to make profits later from sales of ink
and toner.

So Lexmark’s market share disadvantage hurts more
than just its pride; lower volumes make it tougher for the company to
keep costs low on money-losing hardware, and to later milk those
customers for profitable ink sales.In part because of those economics,
Lexmark’s business has suffered over the past few years. Sales shrank
from $5.1 billion in 2006 to $4.5 billion in 2008, and its share has
continued to slip this year; industry leader HP’s sales rose from $26.8
billion to $29.4 billion over a similar period.Now Lexmark has a
comeback strategy that’s focused not on the low-end consumer market but
on businesses, who are likely to buy color laser printers and
multi-function inkjets that fax and copy as well as print. Those
customers, the thinking goes, are more likely to bring in healthy ink
sales down the road.

Most on Wall Street are not convinced that
Lexmark’s strategy will work. Bank of America has an underperform
rating on the stock, saying it’s too soon to tell whether Lexmark’s
strategy has legs. Deutsche Bank has a hold, saying it’s skeptical that
Lexmark can grab market share without simply slashing prices.Still,
Curlander sounds upbeat. The company has survived thus far by cutting
expenses in proportion to declining revenues, and it has held on to
niche customers like pharmacies and bank branches, where its printers
are popular.

Now Curlander is talking up Lexmark’s push into
managed print services, industry lingo for consulting on how businesses
can get their printing done with less waste and less money.He waves off
the observation that Lexmark isn’t alone on the services bandwagon; HP
and Xerox (XRX) are saying many of the same things about helping
customers print less. “We’re actually doing it,” he says. “I’m not
convinced they are.”One of the things Lexmark does have going for it,
ironically, is that investors have punished the stock rather
mercilessly of late  – enough that a few investors are banking on a
rebound. Among the Lexmark bulls is respected Bernstein Research
analyst A.M. Sacconaghi, who has an outperform rating on the stock.

His
bullish case: Lexmark’s sales have actually held up pretty well
considering the overall doldrums in the printing market, which
Sacconaghi believes are due more to the battered global economy than to
an Internet-fueled decline in printing.Lexmark’s failure to hedge
against currency fluctuations makes its cash flows look worse than they
are. Its laser business is healthy. And in early August, Lexmark stock
was at $16.70 – so cheap that investors were valuing its still-sizable
inkjet business at basically zero.Others might be starting to come
around on Lexmark; the stock is up 13% since Sacconaghi made that case
in a note last month. Even so, Sacconaghi has a lofty price target of
$25 on the stock – which means if Curlander wants to prove his
supporters right, these new printers had better be good.

http://www.arnnet.com.au/article/309067/cellnet_cuts_ties_remaining_it_vendors
Cellnet cuts ties with remaining IT vendors(australia)
News follows distributor’s decision to offload its IBM business to Avnet
Cellnet
is terminating its remaining IT relationships and will wind up the
division this month. The news comes after the ASX-listed distributor
sold its IBM business to Avnet.Samsung printers channel manager, Greg
Wallis, confirmed its printer relationship with Cellnet would end on
July 1. He said the distributor had been a strategic distribution
partner but wouldn’t have a material impact on its business.

Lexmark
channel and SMB manager, Stephen Bell, also confirmed the printing
vendor would not be working with Cellnet going forward. It will now
evaluate whether it needs to find a replacement supplier to take up
where Cellnet left off.General manager for UPS vendor Eaton Power
Quality, Michael Mallia, expressed surprise at the developments and
said it had been undergoing joint training with Cellnet in recent
weeks.“To be honest, I am not exactly sure where we stand as to whether
the Avnet guys will take our business across,” he said. “We haven’t had
a chance to talk to them but we have already had calls from Avnet
people to sell UPS anyway. But it is all up in the air right now.”Asus
CEO, Ted Chen, also confirmed the vendor did not expect to continue its
relationship with Cellnet, but would leverage its existing
relationships with other partners, including Avnet.The news follows
Cellnet’s decision to offload its IBM business to rival player, Avnet.

http://www.arnnet.com.au/article/316940/lexmark_finds_cellnet_replacement
Lexmark finds Cellnet replacement
New distie, Dynamic Supplies, aims to bring on more IT resellers
Printing
vendor, Lexmark, has brought on tech distributor, Dynamic Supplies, as
its replacement for Cellnet.Cellnet cut its ties with Lexmark in late
June as part of its winding up Australian IT operations.Dynamic
Supplies was originally a Lexmark distributor of toner and ink
products, but will expand its range to include the vendor’s hardware
range.Lexmark channel and SMB manager, Stephen Bell, said the strategic
move allowed the vendor to use Dynamic Supplies’ targeted resellers
while boosting Lexmark’s geographical coverage and support.“They will
get us into parts of the market where we haven’t had as high a
penetration as we would have liked. They give us some additional reach
into SMB, which is an area that’s growing really strongly for us,” Bell
said. “There’s probably increased support for WA and Queensland.”

He
said the vendor’s existing distributor relationships strongly
influenced the eventual choice.“Because of the fact that we’ve got
really good relationships with both Ingram Micro and Altech, which are
our other two hardware distributors, we didn’t want to make a decision
where we just cut the pie up. And by virtue of Dynamics sort of getting
us into a new market space we have the ability to grow by making this
decision.”

But both Bell and Dynamic Supplies’ managing
director, Scott McLennan, agreed there would be no limitation on the
type of reseller Dynamic Supplies sells to.“We’re certainly replacing
Cellnet, but Cellnet did have a distinctly different customer base so
that’s an opportunity for us to expand our reseller base into what I
would probably term the ‘IT reseller’,” McLennan said.“Our traditional
customer base, which is a fairly strong one that buys a lot of
hardware, is what we call a ‘stationary reseller’.”Although McLennan
confirmed there was going to be an increase in joint marketing funds,
he said the distie was looking at a soft marketing approach.“There’ll
be some marketing promotional programs we will launch with, but they’ll
probably come out in the next two to three weeks,” he said.

While
the distie has high hopes for the new partnership, he had not worked
out an exact expectation of revenue growth, McLennan said.“We’ve got
high expectations but we’re not going to force ourselves into a number.
We’re looking at fairly strong incremental growth. We’ve got big
plans,” he said.“We have a fairly large business in the consumable
space so it would be a fairly small percentage increase for us but I
would say it’s a fairly large percentage increase for our existing
hardware business.”

[Author]

September 11, 2009 at 12:28 PM