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Xerox SOHO Exit Makes Sense, in Context

Press release from the issuing company

6/15/01 - According to The Gartner Group, Xerox has indicated for some time that it wants to focus on its core office document-production and output business, and this move supports those statements. Xerox's decision to abandon the SOHO market may appear somewhat puzzling since its share of the personal copier market is about 50 percent. Xerox also has a large installed base of DocuPrint P series laser printers, produced in an original equipment manufacturer (OEM) arrangement with Sharp. (The DocuPrint N series, the Phaser Network Printers and the WorkCentre Pro series products will not be affected.) However, Xerox has evidently decided that the cost of extending the Xerox brand to personal inkjet printers, as opposed to personal copiers and multifunction devices, and building distribution channels for those printers, was simply too high. In this, Xerox may be capitulating to the domination of Canon, Hewlett-Packard and Lexmark in the SOHO inkjet printer space. Even with a reasonable expectation of success, Xerox just does not have the money — about $1 billion — to crack this market right now. Now that Xerox has made its decision, it must exit the SOHO market gracefully. This announcement will take many users of Xerox SOHO products by surprise. Xerox has indicated that it will continue to offer service, support and supplies for its SOHO products, and its own interests are served by this promise since it will make a profit on selling supplies to its installed base. Nevertheless, most of the products in question come with one- or three-year express return warranties, so if Xerox does not honor its obligations the devices can be returned to the retailers where they were purchased. Gartner further recommends that enterprises with large numbers of Xerox desktop devices seek written assurance that Xerox will continue to support those devices — where possible, by exploiting other purchasing relationships with Xerox. Analytical Sources: James Lundy and Ken Weilerstein, Integrated Document & Output Management