The Wall Street Journal published an interesting article today about Xerox and Kodak entitled When Neighbors Become Rivals. The author, William Bulkeley, says the two have been friendly neighbors until recently as "digital convergence and financial travails are increasingly turning the two imaging companies into rivals." Highlights: - It "will be a battle of the titans" in Rochester, says Frank Romano. The population of the upstate New York city, currently 211,000, has been shrinking because of layoffs at Kodak and Xerox. - Keeping secrets from each other is difficult because "people go back and forth routinely," Mr. Romano says. "It's hard to get talented people to move to Rochester." - Matt Troy of Citigroup, "There are 32,000 commercial printers, and they're going bankrupt at a rate of over 1,000 a year, with profit margins of 1% to 2%. It's a dismal business." - In 2005, Xerox's iGen printers held 37% of the high-end market, compared with 21% for Kodak's NexPress, and 33% for HP Indigo press according to InfoTrends. - Jeffrey Hayzlett, chief marketing officer for Kodak Graphic Communications, says that most print shops already buy Kodak supplies for their offset presses, giving Kodak an entree to sell its high-end presses. "We're the only ones playing in both the conventional and the digital side," he says. "We've been in this print business for over 100 years. We've seen a lot of competitors come and go." - Frank Romano says he expects Kodak will soon start to resell some cheaper digital presses made by Canon. SEE THE FULL ARTICLE (Subscription to the Wall Street Journal Required)
Discussion
By Dr Joe Webb on Feb 23, 2007
re the comments of the Citigroup analyst. As far as I know there are no data about printing business bankruptcies... the number may actually be larger... or it could be smaller! What we do know is that there are 2,000 new printing business entities formed every year. Many of these may be printers just changing their filing structure or opening a new business. There are 3,000 printing businesses that close every year. Many of them may be closed by people who are part of the 2,000 new formations. Whatever the case, the Census data tell us that there are 1,000 fewer printing establishments per year, and bankruptcy may or may not be involved. For many of them it may be a simple case of owner retirement.
By Henry Freedman on Feb 23, 2007
The technology give and take between Kodak and Xerox has gone on for decades now. Chester Carlson the inventory of xerography himself offered Kodak his groundbreaking technology. Had Kodak accepted it there would be no Xerox. Most people don't realize that the US government was instrimental in the funding of xerography as an alternative to Kodak's photographic systems and therefore Kodak was at a key disadvantage. Haloid Corp of Rochester, made up of many Kodak employees was the winner. The reason for this early government funding was an alternative to certain Kodak technologies that the US Army needed to have direct substitues for national needs as reported in Technology Watch 20 years ago. Xerox in turn in the 70's also had a consent decree with teh US government that reuired them to release over 14,000+ key patents that in turn led to Canon's entry to the market. Yet they are still number one in the lucritive color printing market holding off a rath of asian susbstitute products. Kodak and Canon have been selling electronic printing technology together for years. Some key technologies in Canon's line came from Kodak. Since Kodak does not presently offer lower end color production systems - and - has an on ramp to the conventional market it has had a well known long standing relationship between Kodak and Canon that has gone on for decades, this is not new. While many look quickly at the numbers of the "shrinking" printing market by using statistics based on a narrow view of the business, the market is actually growing as Xerox's income shows. Analysts do not properly measure the market since they do not report how many new entrants there are. OfficeMax alone has ordered over 600+ digital color presses from Xerox. The manufacturers are making everyone there own "Gutenberg" and as a result more color pages are being printed than ever before -- with a higher income per page for vendors and the expansion of printing to fill in the photographic market actually expands the industry not contracts it. Xerox stock has passed $18 a share recently from a low of around $4 a few years back as a result of their shooting themselves in the foot with accounting misbehaviors. Kodak can have some of this market and HP is no dummy either thus major coroporations agree this is to be a substantial market opportunity.
By Liz Cunningham on Feb 23, 2007
I have written in our trade books that Canon office sales people will not be able to sell their new entry-level ImagePress to the photo shop or digital printer. At least Kodak knows this market and needs something new to sell. Liz Cunningham Cygnus Business Media
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