Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now

×

Open Scramble For Vacated Xerox Share Of SoHo Space

With Xerox’s retreat from the retail SoHo category almost complete, a bit of a scramble is taking place, as the segment’s other competitors vie for the abandoned market share.

Hewlett-Packard, Sharp and Samsung are among those who expect to grab at least some of Xerox’s share in the multifunction device and inkjet printer markets, but while the companies have a common goal, each is taking a different approach. Sharp and Samsung have developed specific plans, while HP feels its already-dominant position in this market will bring in Xerox’s customers.

Sharp feels it is uniquely qualified to fill the gap, said Keith Post, vice president of the home office and business products division, because it already manufactures most of the Xerox-branded MFP product being sold. In addition, Sharp was a major partner with Xerox, and Fuji Xerox, in developing a line of entry-level inkjet printers.

“There is going to be a void in the mind of retailers and end users, they will want an alternative and we want to be it,” Post said.

Sharp does not expect to realize any actual sales gains in the market until the Xerox merchandise is flushed out of the channel in the late fall. At that time Sharp will add a new line of copier-centric multifunction devices to help fill the gap. A four-in-one, inkjet based multifunction device has just been introduced and Sharp is considering expanding its presence in the inkjet area, possibly with a stand-alone product, Post said.

“We realize that to play in the home we need to be in the color arena,” he said.

Samsung, primarily a supplier of laser printers in the SoHo market, did not directly compete against Xerox in most categories, but is looking to take advantage of the situation in another way.

“We are talking to retailers about grabbing some of Xerox’s shelf space,” said Erin Burns, Samsung’s printer marketing manager.

In particular Burns sees this as an opportunity to move into the high-end consumer printer market, now dominated by inkjet models, with Samsung’s low-end laser models. Samsung does sell some multifunction products through niche channels like QVC and online, but there are no plans at this point to bring them into the retail channel.

HP has few specific plans for dealing with this newly found market share. “Overall we are the industry leader in this space,” said David Laing, product marketing manager for MFPs in North America. “But we may consider some specific channel-related activities.”

He cited NPD Intelect, Port Washington, N.Y., statistics for May, which gave HP 70 percent of the market for inkjet multifunction printer devices.

The loss of Xerox as a competitor in the multi-function, or all-in-one as HP calls the category, could add fuel to a HP’s already hot sales. The all-in-one product is one of the few bright spots in HP’s consumer products line, with Laing calling it the fastest growing hardware product area for the company. HP is predicting a bright future for the MFP business with sales projected to grow 20 percent for the remainder of the year.

“We have actually seen some impact on sales to stand-alone printers and scanners because of the MFPs growing sales,” Laing said. The increased interest was attributed to an increase in telecommuters and their desire to equip their home offices with a single machine.

The fact that Xerox managed to fail in a category that has shined during the overall downturn in computer product sales did not come as a surprise.

Laing said Xerox’s decision to pull out of the market was not a total shock since their share had been dropping for some time.

Sharp’s Post said he had a very good idea this would happen because Sharp saw a decline in orders placed by Xerox for more Sharp-made, Xerox-branded products.

Xerox cited difficult economic conditions and mounting losses when it announced in May that it was pulling the plug on its entire retail operation and abandoning the production of SoHo products.

At that time Xerox president and CEO Anne Mulcahy called the decision difficult but necessary, since the company lost $82 million on SoHo products in the first quarter of 2001 and expects a similar loss in the second quarter. The products affected are the company’s newly introduced inkjet printers, copiers and multifunction printers.

“The slowdown in the PC business and lower inkjet [retail] prices kept investors away. We expected rapid growth in the inkjet market, but in the last few months it has fallen apart and will not recover anytime soon,” Mulcahy said.

Featured

Close