*NEWS*XEROX & LEXMARK SHOW WEAK OEM SALES

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*NEWS*XEROX & LEXMARK SHOW WEAK OEM SALES

 user 2006-10-30 at 10:19:00 am Views: 66
  • #16824

    For Xerox and Lexmark, OEM Sales Show Weakness
    The days when executives of major printer manufacturers look at huge OEM deals with dollar signs in their eyes may be waning.
    Lexmark and Xerox, rivals in the document technology space, both reported to financial analysts this week that sales of products they manufacture for other vendors continue to be weak, while sales through the channel of their own, branded products continue to show strength.Anne Mulcahy, Xerox’ chairman and chief executive, told analysts in a conference call after the company posted earnings this week:We continue to see a slowdown in sales of desktop color printers, primarily in our OEM products, but Xerox-branded printers were stronger this quarter.And:The pace of growth in color printers, primarily from OEMs, did slow this quarter, with color printers down 6%.And:On the environment, I’d put the most competitive part of the environment, it continues to be the very low end of color printers. We’re seeing that in terms of the pressure on our OEM partners, in terms of some of that performance, although we were really pleased with our own branded activity, which was up 13% this quarter. Our branded color printers are also at the high end of the product range, which drive more pages. So given our druthers, our preference would be to have a more significant performance in the branded printers.Lexmark found itself in a similar situation in its third quarter. Its Chairman and CEO Paul Curlander told financial analysts on a conference call after Lexmark earnings were posted:All i can tell you is that for this quarter. . . on a year to date basis, OEM sales are down in both the laser and the inkjet business. It’s kind of hard to predict going forward. But no question, we’ve seen a weak year in OEM sales.Both Lexmark and Xerox (including through its Fuji Xerox joint venture) are OEMs for Dell – which has been reporting its own significantly slowing growth and a drop in profitability. Lexmark has listed Dell as one of its biggest customers. At the same time, both Lexmark and Xerox are reporting growth and strength in their branded businesses.