The following is a quick review of copier/MFP industry news from various trade publications.
Xerox won a bid to provide 3,500 printers & MFPs to KeyCorp, a large financial company. Details:
- Reduced equipment from 10,000 placements to 3,500, removing fax machines, desktop printers and scanners.
- 6 year contract
- Xerox claims it will save KeyCorp $6 million over total contract term
- 120 locations involved
- Was a managed print services contract
Xerox is bundling its 700 model color laser MFP with special software in an attempt to market it to photo finishing labs, as a high speed photo publishing system. The software package is called Xerox FreeFlow Photo Automation Tool with the Picture Me Profitable Kit and offers 50 templates, color management, as well as job ticketing.
The IRS has discovered that a firm in Rochester, NY has apparently bilked Xerox for more than $8 million. Clark Auto Electric, which was contracted by Xerox to service the forklifts in its warehouses, supposedly charged Xerox for service never performed and parts never installed.
Xerox reported more details on its financials:
- 4th quarter revenue declined 14%
- 70% of revenue and 80% of cash flow is generated from annuities
- Annuity revenue during past year was $12.9 billion
- Cash balance at end of 2008 was $1.2 billion
- Company has $2 billion credit facility
- Total revenue for 2008 of $17.6 billion
- Full year income of $230 million
- 5% of revenue invested in R&D
- 3400 employees let go
- 2008 bonuses scaled back
- Some will receive no salary increases
- Training and travel expenses reduced
- Color is 41% of revenue
- Color pages made under service contract grew 24%
- Color pages account for 18% of total pages under contract
- 7,500 sales reps total
Xerox announced it will offer coin-op and usage tracking systems from Showcase Technology. Called the EzTrans, it distinguishes between black & white and color, and bills at the appropriate rate.
Xerox announced it has sold one of its $640,000 iGen4 production color systems to Shutterbug Photo Mall of Bowling Green, Kentucky, who will offer web-to-print products over the Internet.
Kyocera Mita won for the second time, the Evergreen Award from the U.S. Government (GSA) for its use of silicon amorphous silicon drum technology used in its laser printers.
Kyocera, which stands for Kyoto Ceramic, is apparently sitting on $9 billion in cash that it has made over the years selling ceramic products to the computer industry.
International Laser Group (ILG), a large maker of compatible laser cartridges, announced it hired Rob Gilbert to run its Managed Print Services division. Mr. Gilbert came from competitor, Compass Sales Solutions, where he was Director of Sales. He also spent time at IKON.
Toshiba’s copier division president, Mark Matthews, sent out a press release denying that Toshiba Corp. is considering selling its copier division to Canon.
Toshiba announced it is opening up a tech support call center in Lebanon.
In a cost cutting move, Ricoh apparently announced the following changes for its employees:
- suspend the employer match to the 401K plan for FY2009
- no merit increases planned for FY2009
- bonus control program which caps payment at 75% of the annual potential for bonus payout
- hope these actions will save the company $20 million in FY2009
- universal standard workweek moves from 37.5 hours to 40 hours, without an increase in pay
Ricoh’s CEO, Shiro Kondo, in an interview with Reuter’s said:
- Total purchase price of IKON was $1.6 billion
- In January, 90% of IKON’s sales were Ricoh devices
- Previous to the acquisition, only 30% of IKON’s sales were Ricoh
- Hopes to boost total worldwide revenue to 2.5 trillion yen (despite bad economy) by 2011
- Expects operating profit to drop a staggering 45%
- Expects its sales to drop 3%
Ricoh, at a Japanese trade show, showed an erasable copy paper. It had an employee in a booth taking prints from a special Ricoh laser printer, and then applying a traditional clothes iron to remove the image.
IKON/Ricoh announced it won a bid for a large university in Indiana. Ivy Tech Community College awarded the contract with these details:
- 5 year term
- Supposedly will save college a total of $2 million
- 300 copiers in 14 locations
- Will reduce the number of devices by 90%
- Reduced number of copier brands from 10 to two
- Reduced number of suppliers from 14 to one
Ricoh held its convention for its Savin dealers recently. Details:
- Held at Orlando World Center Marriott in Florida
- All three Ricoh brands, Lanier/Savin/Ricoh, now report to same management structure, comprised of 4 regional vice presidents with goal of more efficiency and less conflicted distribution.
- Kiyo Shimizu stated that there is no good business reason to eliminate the Savin brand
- Savin represents 31% of all color units from Ricoh dealers and 26% of total revenue
IKON/Ricoh still involved in a large lawsuit in California. An appeals court reversed a lower court’s decision to dismiss an antitrust suit against IKON. A three judge panel of the U.S. Court of Appeals for the Ninth Circuit said that the case against IKON, brought by two dealers in the San Francisco area, has merit. The two dealers are Pinnacle Document Systems and Newcal Industries who began the lawsuit over IKON customers who supposedly had their IKON leases extended illegally.
In Ricoh’s most recent Quarterly report:
- company lost $75 million on sales of $1.4 billion (this includes two month of IKON sales)
- With IKON, Ricoh revenue was up 25% year over year, but without IKON, revenue would have been down over 15%
- For past 9 months, Ricoh posted loss of $125 million
Ricoh announced that by 7/2009, it will force its dealers to order product only on-line, instead of fax.
Ricoh announced a new Toner Container Return Program. Ricoh customers are allowed to purchase a special box and postage to put their empty Ricoh toner cartridges into, for return to manufacturer.
The owner of a Sharp copier dealership in Chicago area is named to the board of directors of Select Dealer Group. Chip Micelli, of Des Plaines Office Equipment, joins 39 other dealer owners in this group, focused on the future success of the independent dealer community. Mr. Micelli is considered an expert on managed print services.
The following was revealed in a survey on in-plant central reproduction departments (CRDs):
- While in 2004, only 62.9% used digital production color devices, now 85.9% use them
- While in 2004, only 71.1% used digital production b/w devices, now 85.1% use them
- 70.6% off all color pages are coming from digital devices versus offset, and predict it will grow by 2010 to over 75%
- Only 47% use print management information systems (MIS)
- Only 53.2% use variable data software
- Only 47.6% use mail preparation software
- Only 37.2% use web-to-print software
- Only 61.4% use workflow management software
In a blow to struggling printer maker, Lexmark, its creditworthiness was degraded. Standard & Poor’s Ratings Services lowered its rating on Lexmark to one notch above junk status, or BBB-. Lexmark stock has lost about half of its value since peaking at $37.55 last summer.
Abhishek Corp., announced it will offer paper for copier/printers made from wheat straw, called Spectra and MyChoice.
Oce’ announced it will resell software from NewForma. Their “Project Center Software” provides improved workflow for the architectural and engineering markets.
Canon is suing former employees for allegedly revealing company trade secrets and other proprietary information to IKON/Ricoh. Bill Crow and 10 others were named in the complaint filed by Canon in the U.S. District Court for the District of Arizona.
Canon has $8.5 billion in cash, a substantial amount of which was made by selling printers and toner cartridges to Hewlett Packard.
Hewlett Packard, with its EDS division, announced it had won a 10 year, $1 billion contract to retool Aviva Corp.’s data centers.
DocuAudit announced it will pay a license fee so that it an use FMAudit’s database of printer information. The database provides model number, specifications and toner cartridge information, and allows the creation of TCO (total cost of ownership) proposals.
Latest research on office equipment industry predicts:
- b/w copier placements in the U.S. will decline from 1.1 million units in 2007 to 900,000 in 2008
- b/w copier placements will decline another 20% in 2009
- by 2012, b/w copier placements will be around 500,000 units
- Color copier placements will rise from 250,000 in 2007 to 292,000 in 2012.
- Total placements will decline from 1.35 million in 2007 to 1 million in 2012 (30% decline)
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