Lexmark's laser focus to boost NZ Channel?

Lexmark’s decision to dump its inkjet business and focus on the more profitable imaging and software businesses could be a positive for the New Zealand channel, according to one industry analyst.

Cheryl Looi, IDC Asia Pacific (ANZ) market analyst, says while the company’s departure from the inkjet market will have minimal impact – Lexmark holds less than one per cent of that market locally – the company’s increased focus on the laser market could be a positive for the channel.

“Channels who are able to have conversations with Lexmark on their future road map would most likely benefit from it,” Looi says.

“The reason is because there are so many ways Lexmark can expand its business and provide more value to its channels and end-users. Channels will need to understand further how they could best leverage on it.”

The company has never been a huge player in inkjet printer. It will continue to sell laser printersLexmark announced in late August that it was exiting the remaining business inkjet hardware business in a move expected to result in annualised savings of US$95 million once fully implemented.

The company says while it won’t be making any new inkjets, it’s not abandoning its current inkjet customers and will continue to provide service, support and aftermarket supplies for its inkjet installed base.

Lexmark will close its Philippine inkjet supplies manufacturing facility by the end of 2015, and eliminate inkjet development worldwide.

The restructuring is expected to cost 1700 positions worldwide, including 1100 manufacturing positions and Lexmark expects to incur costs of US$160 million for the restructuring, including US$110 million in 2012.

Paul Rooke, Lexmark chairman and chief executive officer, says the company’s investments are focused on higher value imaging and software solutions.

“We believe the synergies between the imaging and the emerging software elements of our business will continue to drive growth across the organisation," he says.

Looi says she believes Lexmark’s move is particular to the company itself, rather than indicative of the state of the printing market at this point in time.

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