Xerox readies printer, production system barrage

NEW YORK — Fresh from a positive earnings report released earlier in the week, Xerox Corp. Thursday is set to stay upbeat with the launch of new printers, services, and production systems at its annual product, customer and analyst gala in New York.

Although the announcements don’t feature as major an overhaul of the company’s product lines as was introduced at last year’s event here, the company is strengthening key areas in its printing and production systems, according to analysts briefed by Xerox.

“I would agree this is more of an evolutionary announcement, not as revolutionary a step as last year’s launch,” said Peter Grant, an analyst with market researcher and consulting group Gartner Inc.

However, the announcements show the company is, for example, shoring up its product line with new technology and fast printing speeds at competitive price points, keeping pressure on Hewlett-Packard Co., which remains the market share leader in printers overall, analysts said.

“Xerox is showing that it can continue to innovate in the office printer market,” Grant said.

The new printers, according to Xerox, include the following:

— The Phaser 4500, a black-and-white laser printer, available immediately worldwide at a starting price of $979. It offers 36 pages per minute, 1200 dpi (dots per inch) and a 400MHz processor.

— The Phaser 8400, a color printer immediately available worldwide at a starting price of $999. The 8400 has as much as 512M bytes of memory, automatic two-sided printing, a 500MHz processor and USB (Universal Serial Bus) 2.0, parallel and Ethernet connectivity.

— The Phaser 7750 color laser printer, now available starting at $5,599. It prints at 35 pages per minute, runs on a 715MHz processor, comes with USB 2.0 and Ethernet connectivity and can print at 1200 dpi (dots per inch).

“In printers, HP is clearly the dominant player, and it does not seem to be messing up its lead, but Xerox’s new Phaser 8400 hits that magic sub-$1,000 price point, where you see a wide range of customer interest, with very good performance for a color printer,” said Keith Kemitz, an analyst with market research company IDC, who was briefed by Xerox.

The sub-$1,000 products, however, point to a gap in Xerox channel strategy, which is its absence from the retail market, analysts said. Though Xerox got out of the retail market to focus on office systems, the new sub-$1,000 products suggest that the company would do well to consider getting back into retail distribution, at least in limited way, said both Kemitz and Gartner’s Grant.

“Xerox is not going to compete with low-end Minolta (Minolta-QMS Inc.) systems, for example, but the new Phaser is a product that could appeal to customers such as small businesses who want something more robust than a $500 printer, and would be willing to spend up to about $1,000,” Kemitz said.

Analysts do not expect Xerox to start selling through retail superstores, but office-product stores might afford a good venue for its lower-cost office systems, they said.

Perhaps more significant than the printer announcements are the launch of new DocuTech production technology and new production systems, where Xerox remains market share leader, analysts said.

The Xerox DocuTech100 and DocuTech 120 copier/printers slated to be launched Thursday are designed to strengthen the company’s offering for the short-run, on-demand printing market, according to Xerox. Xerox will start selling the systems in February. U.S. prices start at $77,000 for the DocuTech 100 and run to $99,000 for the higher-speed DocuTech 120.

“The new production systems strengthen the midrange of Xerox’s production line and address a real need for a device between the light production systems and the high-end line,” said Lynn Ritter, an analyst at Gartner.

“Ricoh (Corp.) and Canon (Inc.) have beaten up Xerox in low-end production systems,” Ritter added. The new DocuTech systems target users looking for something more robust than low-end systems — from either Xerox or its competitors — but who may not want to pay for high-end systems priced at $250,000 or more, Ritter said.

Rounding out the announcement Thursday is an expansion of consulting and implementation services for the high-volume printing and office markets.

Announcements include the debut of Xerox Production Services, designed to help clients implement and manage high-volume printing technology, and Xerox Communications Services, aimed to help users design and measure the impact of business documents including marketing and client enrollment kits.

Services and after-market sales are a big part of Xerox’s business and the Production Services appear to be a formalization of current offerings, Ritter said.

In financial results announced Tuesday, Xerox said that fourth-quarter revenue from the company’s targeted growth areas, including digital office and production systems as well as value-added services, grew 10 percent from the year-earlier period and accounted for about 73 percent of the company’s revenue. Fourth-quarter net income was $222 million, compared with $19 million a year earlier.

More details on new products and services are expected during the day-long event in New York, where Xerox executives including Anne Mulcahy, the company’s chairman and chief executive officer, are scheduled to speak.