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 user 2009-05-22 at 11:16:08 am Views: 60
  • #21932
    Mulcahy retiring as Xerox CEO; Burns tagged as successor
    management company Xerox Corp. reports that Anne M. Mulcahy, chairman
    and CEO, will retire as CEO on July 1.The Norwalk, Conn.-based company
    says that Xerox president Ursula M. Burns was named by the board of
    directors as the new CEO. Mulcahy will keep serving as chairman of the
    board.Mulcahy, 56, assumed the role of CEO of Xerox on Aug. 1, 2001,
    and  was named chairman on Jan. 1, 2002. She rose through the Xerox
    ranks, having started as a sales representative in 1976, eventually
    serving as president and chief operating officer of the company from
    May 2000 through July 2001. Mulcahy has also held senior management
    positions in sales, human resources and marketing, and led the Xerox
    business division that sells products for reseller and dealer
    channels.Mulcahy is credited with — among other accomplishments –
    creating Xerox Global Services, which offers document-related
    outsourcing, imaging and consulting services, which in 2008 generated
    $3.5 billion in revenue.Burns, 50, joined Xerox in 1980 as a mechanical
    engineering summer intern and later took on roles in product
    development and planning. In 2000, she was named senior vice president,
    corporate strategic services, heading up manufacturing and supply chain
    operations. Burns later took on the broader role of leading Xerox’s
    global research as well as product development, marketing and delivery.
    In April 2007, Burns was named president.Xerox employs approximately
    57,100 globally and reported a 2008 profit of $230 million on revenue
    of $17.6 billion.
    Xerox keeps up R&D, risks cannabilization
    * Plans to keep R&D spending level despite recession
    * Company introduces new line of solid ink printers
    * Does not fear risk of cannibalizing own laser printers

    YORK, May 09 – Eyeing a chance to bear down on its rivals, Xerox plans
    to keep up the pace of spending on research and development, even if it
    means cannibalizing some of its products as customers rethink their
    choices about office equipment.

    Xerox President Ursula Burn is
    driving engineers at the printing and document management company to
    come up with ideas such as a new solid ink system ColorQube, whose
    print heads can jet over 150 million drops of ink per second.”We are
    extremely bullish and fairly dogmatic on research and development and
    how you invest in it during good times and bad. It’s tougher to make a
    dollar than it’s ever been in my life, but a dollar can still be made,”
    Burn told Reuters in a recent interview.”We are making sure that we do
    not damage our infrastructure and our value proposition. That’s why we
    are still investing in innovation.”

    Xerox, which reported $17.6
    billion in sales in 2008, slightly better than the year before, spends
    around $1.5 billion on R&D, Burns said. That includes development
    costs at Fuji Xerox, a joint venture between Xerox and Japan’s Fuji
    Photo Film Co.Xerox’s R&D budget — exclusive of Fuji Xerox — has
    declined in each of the past three years, falling to $883 million in
    2008.But proportionally, the company sees 2009 on par with recent
    years. At its analyst day in November, CFO Larry Zimmerman pegged 2009
    R&D spending at 4-5 percent of revenue. This compares with 4.9
    percent in both 2008 and 2007.

    three years of development, Xerox earlier this month introduced
    ColorQube, which promises to shrink the cost of color printing for
    high-volume users to 1-3 cents per page, on par with that of black and
    white printing.The product line, aimed at users who print 15,000-30,000
    pages a month, also creates less waste — a “green” angle that Burns
    hopes will help lure customers of rivals including Ricoh, Canon and
    Hewlett-Packard Oddly enough, ColorQube can replace laser printers,
    those workhorse models found in a multitude of offices — many made by
    Xerox. Burns says she is not afraid that customers might replace one
    Xerox machine with another.”We are more concerned that there is
    significantly more opportunity to attack our competition,” she said.
    “The best way to grow our business sometimes is to cannibalize our own,
    or to cannibalize a technology …. It’s a beautiful problem to have. I
    lose no sleep being in this situation.”

    The goal of most leading
    printing and document management companies is to seed the corporate
    landscape with machines.While business may be slow due to the economic
    downturn, the companies that survive will still need to print internal
    communications, as well as documentation for both current and
    prospective customers. Color is seen as a way to spur response from
    those who are targeted.But Burns, along with Xerox Chief Executive Anne
    Mulcahy, may be kept awake by the pace that its customers are delaying
    purchasing decisions. Xerox’ first-quarter earnings report showed a 14
    percent decline in color revenue and a slowdown in color page growth.

    firm IDC, in a statement that praised the advanced technology of
    ColorQube, noted however that customers who might desire color systems
    aren’t immune to sticker shock.While Xerox’s ColorQube contracts employ
    a system whereby users pay for the ink used — rather than pages
    printed — the machines introduced this month range from $21,000 to
    $26,000.”Until color hardware prices are nominally higher than
    black/white laser’s, the adoption curve of color in the office will
    continue to be evolutionary and not revolutionary,” said Angele Boyd,
    IDC’s research vice president for hardcopy peripherals.

    admits the economy is unpredictable, and that even this new
    printer-and-ink line line won’t pack much financial punch this year.”I
    wish this product could turn the economy around. But we are not
    expecting (that),” she said. “We expect that the financial impact of
    this product in 2009 will be very small primarily because it is the
    introduction year. But as the machines expand in the field, as the
    economy gets better, we expect to see a measurable impact.”