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Gartner: Lack of High-volume Offering Could Challenge Lexmark

Thursday, April 18, 2002

Press release from the issuing company

April 18, 2002 - According to Gartner analyst, Ken Weilerstein, Lexmark’s new multifunction printers (MFPs) will satisfy some small firms’ needs for printers, copiers and fax machines. But larger enterprises that also need high-volume copiers may prefer to look elsewhere. Weilerstein offered Gartner’s first take on the subject. Last week, Lexmark presented two new MFPs, which combine printing, copying, scanning and faxing capabilities. Both include a scan-to-e-mail capability and an improved graphical user interface (GUI): - X620e, a monochrome printer that operates at 30 pages per minute (ppm) and scans in color, retails for $6,999. - X750e, a color printer, retails for $11,799. - x4500 MFP option converts most of Lexmark's workgroup printers into MFPs. “Lexmark has successfully transformed its workgroup printers into MFPs, but Gartner believes that several larger challenges constrain Lexmark's chances for success in MFPs. Lexmark's MFPs will appeal to enterprises that want to replace aging convenience copiers and workgroup printers with speeds of 20 to 49 ppm. By combining functions, MFPs reduce the number of machines to purchase, service, maintain, and keep loaded with paper and supplies. “The X620e and X750e will do particularly well in small sites that haven't enough volume for faster copiers. The products compare favorably to rival Hewlett-Packard's (HP's) MFPs. For example, the X750e is much more up-to-date and faster than HP’s color workgroup MFPs. Therefore, as the LaserJet 9000 MFP and other HP models generate interest, Lexmark will also benefit. The X620e and X750e have a GUI that lets users operate and explore the features of the MFP with minimal training — no small feat. Enterprises that have Lexmark printers can upgrade them into MFPs in the field. “However, Lexmark faces the following challenges: * Most enterprises rely on faster copiers and MFPs (49 to 85 ppm). Indeed, enterprises often buy MFPs to move the page volume from workgroup printers to high-volume machines that have lower per-page costs, and better paper handling and finishing. In addition, enterprises prefer to deal with a single copier supplier. Thus, the lack of a high-volume offering will leave Lexmark at a disadvantage against high-end vendors such as Canon, Ricoh and Xerox. Of course, Lexmark could develop a high-end printer/copier engine of its own or use an original equipment manufacturer. * Lexmark must provide the more intensive service that MFPs require, especially at higher speeds and page volumes. * Lexmark must use targeted marketing and word-of-mouth to win over the non-IT workers who influence MFP purchases (e.g., office managers). It has taken the first step by directly contacting facility managers. “Enterprises should consider the Lexmark MFPs where offices have workgroup printers and convenience copiers that need replacing. Enterprises with some high-speed copiers should assess whether Lexmark's limited range of MFPs can meet all their needs and, if not, whether it is worthwhile to have two MFP vendors. The one-vendor strategy will likely prevail most often.” Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and consists of 4,300 associates, including 1,200 research analysts and consultants in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million.

 

 

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