Xerox Takes On HP With New Color Printer

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Includes: HPQ, XRX
by: Judith Levy

In a challenge to market leader Hewlett-Packard, Xerox unveiled on Monday a solid-ink printer that prints in color for the cost of black-and-white. The Phaser 8860 printer, intended for high-volume use, employs wax ink sticks rather than the cartridges of colored powder used in laser printers. Xerox claims the system functions like an offset press, creating richer colors while using fewer disposable parts and thus lowering the cost of maintenance. The new technology cuts the cost of color printing to approximately $0.05 per page, much less than existing systems. "If you compare HP color toner to what our inks will be, we will be one-fifth the price," said Xerox VP Jim Rise. "Sure, cost per page is important, but it’s not more important than print quality or ease of use," said Vincent L. Ferraro, VP for worldwide marketing for HP’s laser printing business. "We still think that laser delivers a higher quality image in a faster amount of time." The new printer is priced at $2,500-4,000, or about $1,000 more than other Xerox printers with similar functions, according to IDC research analyst and VP Angele Boyd. "It's clear when you look at the price that the target is not every color user out there," she said. HP holds 40% of the global office laser printer market, Xerox 10% and Canon about 7%. The global market for laser color printers is $5.1 billion; black-and-white printers are a $10.1 billion market.

Sources: Wall Street Journal, New York Times, Business Week, Reuters
Commentary: Would You Buy Xerox's New 'Green' Paper?Xerox's Latest Quarter Was Truly Mediocre
Stocks/ETFs to watch: XRX. Competitors: HPQ, CAJ. ETFs: PHW, IWS, UVU
Earnings call transcript: Xerox Q2 2007, Hewlett Packard F3Q07

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