Xerox chief predicts historic comeback

Anne Mulcahy, struggling Xerox president and chief operating officer, told a
packed Comdex conference that her company is about to make business history with
an expected strong turnaround from the problems it has been experiencing in the
past year.

"I'm excited to be part of what will be one of the greatest comebacks in
business history," Mulcahy said, adding that Xerox's advantages in the
small office home office (SOHO) market, the digital office, and high-value
printing solutions will drive the comeback. "That's where we're placing our
biggest bets, and that's where the odds are in our favor."

Mulcahy cited a new $310 million contract with the Kinko's chain of photocopy
and printing services as just a first indication of the things to come. The deal
includes use of more than 2,000 Xerox products to be installed in Kinko's North
American stores. Mulcahy said Xerox has the "right stuff" to achieve a
turnaround. The company's focus will be on products for the $208 billion market
for documents. More than 60 products have been announced so far this year. And
the company has invested $1 billion investment in R&D with a strong focus on
putting color output in just about any device. Already, Xerox has seen a 74 per
cent growth in color printer revenues in the third quarter as an especially
encouraging sign.

Looking ahead, Mulcahy said, "Next year, we'll double the speed of our
fastest office color printers as we continue moving color into the
mainstream." She also revealed that a new family of multifunction,
Internet-ready WorkCenter Pro products will be announced, priced at about half
the cost of current digital office systems. "We have great confidence that
we'll be leaving our problems behind us," she said. "Xerox has faced
many challenges in the past. Every time, we have emerged stronger and better for
it. I'm confident we'll do it again."