Xerox, Sharp, Fuji gang up for HP’s ink printer share

In the biggest assault on inkjet printer market leader Hewlett-Packard, Xerox announced an alliance with Japan's Sharp and Fuji Xerox (a joint venture between Xerox and Fuji Photo Film) to develop and market a new generation of faster, cheaper inkjet printers for small and home offices. To gain broader market acceptance for the new products, all three firms will market nearly identical lines of printers and invest a combined $2 billion over three to four years in inkjet research, development, manufacturing and marketing.

"We're reinventing ourselves in our new mode. Our health is better than some might believe," said Xerox Chief Executive and President Rick Thoman. To be sure, Xerox can’t go anywhere but up in the inkjet printer. It supplies market where it currently has a scant 1 per cent of the $57 billion ink jet printer market, compared to 43 per cent for HP, 24 per cent for Epson and 10 per cent for Lexmark. Even Compaq’s 2% is double Xerox’s part of the business.

Thoman said the goal of the program is to boost market share above 10 per cent in the next three to four years. Analysts said that while strategy appears promising, success would depend a lot on the quality of the new products and the companies’ will to slug it out with HP and others. Xerox has not been known to be an aggressive competitor in cut-throat markets "They're going up against some pretty significant brands," said Paula Bursley, an analyst at Dataquest.

The first of the new printers will be in stores as early as June. They will feature quick-drying ink, fast-drying speeds and more versatile ink tanks. Sharp will offer its version of the inkjet products in North America, Europe and developing markets as well as in Japan and the Asia-Pacific region. Fuji Xerox-branded products will be sold in Japan and the Asia-Pacific region.