*NEWS*KYOCERA ISSUES PRICE WAR WARNING

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*NEWS*KYOCERA ISSUES PRICE WAR WARNING

 user 2006-02-06 at 10:43:00 am Views: 82
  • #13965

    Kyocera issues price war warning
    Vendor claims poor performing printer market may affect prices of consumables
    Printing and imaging vendor Kyocera has claimed that the industry is on the verge of a consumables price war.
    The warning comes on the back of last month’s announcement by Lexmark that it is closing its inkjet cartridge manufacturing facility at Rosyth in Scotland, resulting in the loss of 700 jobs.
    Tracey Rawling Church, head of marketing at Kyocera, said a poor performing printer market may affect the pricing of consumables.
    “Driven by the need to increase margins on consumables to cover losses sustained on hardware sales, the only option remaining for many companies with this business model is to strip the costs out of consumables production,” she said.
    Rawling Church added that research from analyst Context last year had discovered that printer revenues had fallen by 10.1 per cent year on year, despite unit sales increasing by 8.5 per cent, and that the consumables market could mirror the price war seen in hard
    “Vendors will begin competing on consumables price, and customers are looking at lower-cost alternatives such as compatible cartridges and refills,” Rawling Church said.
    “This leave some firms in the position of making a loss on hardware and no revenue on consumables. It’s tempting for these companies to begin competing on consumables price.”
    Jason Harcourt, senior analyst at Context, said: “The UK printer industry appears to be in a state of collapse, and sales have been disastrous. But I see no reason for consumables pricing to drop. Vendors might bolster revenues by keeping prices high.”
    Harcourt added that the consumables market has been the “cash cow” of the printer industry in the past, and offices still need consumables products. This will ensure the market remains steady in 2006.