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Lexmark exits the inkjet market: Are printers doomed?

Melissa Riofrio | Aug. 30, 2012
Lexmark's announcement earlier today that it will stop making inkjet printers shocked me. I've been testing and reviewing printers for PCWorld for as long as Lexmark has been in the inkjet printer business--almost 20 years.

Lexmark's announcement earlier today that it will stop making inkjet printers shocked me. I've been testing and reviewing printers for PCWorld for as long as Lexmark has been in the inkjet printer business--almost 20 years.

What does it mean for the inkjet market in general, and for your Lexmark printer (if you own one) in particular, that sizable company like Lexmark is getting out of the business? Let's examine this decision.

Why Lexmark Matters

A lot of people may not care whether Lexmark inkjets live or die. After all, for most of the years that Lexmark was making inkjets, its products were notoriously bad.

Lexmark inkjets were inexpensive, cheaply made, and subpar in performance, and the company was almost shameless about the high prices it charged for replacement inks. Even if you received the printer for free when you bought a new PC, as many users did, you regretted its shortcomings sooner rather than later.

To Lexmark's credit, however, over the past several years, the company has made concerted efforts to improve its products. For instance, a line of small-office printers delivered good speed, solid features, and reliable print quality, along with cheaper inks and longer warranties than the competition did.

Just a few months ago, the company launched a corporate line of inkjets called OfficeEdge whose models were as good as or better than any of its rivals' offerings.

Lexmark certainly faced an uphill battle to improve its image, given the many users who remembered the bad old days of Lexmark inkjets. But if the recent, much-improved products couldn't make a dent, that says as much about the state of the inkjet market as it does about Lexmark.

Consumers Flee Inkjet Printers; Businesses Fill the Void?

Lexmark's decision to amputate an entire business unit suggests that the sales numbers were dramatically bad--bad enough to make a hard stop its only viable choice. After all. it costs money to design a printer, manufacture it, and sell it.

The profit margins are in the ink, however, so my recent discovery that Lexmark had increased the prices of some of its inks by as much as 20 percent might have been a clue that Lexmark wasn't doing well.

The money in printer sales seems to be moving away from consumers and toward business users. In the past three years, Epson and Lexmark have been turning away from consumer inkjet sales to focus more on workforce inkjet printers.

For instance, HP CEO Meg Whitman said on August 22 as part of the company's recent and dismal earnings announcementthat a steep decline in HP printer sales was due in part to a company decision to de-emphasize products for lower-end customers.

 

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