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 user 2008-04-21 at 1:10:06 pm Views: 80
  • #19589

    Best Buy drops Lexmark printers
    ‘Disturbing sign for the future of inkjet’
    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

    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.