With business colour taking off, one of the later starters is now facing up to the penalty it must pay to win channel and market share.
Lexmark is making an aggressive bid to claw some colour business printer market points away from Hewlett-Packard and Tektronix with limited-time price cuts of between 28 and 40 per cent.
Lexmark Business printer product manager Ian Clohessy said that the price cuts to the colour printer range are for a limited time, ending June 30, and are designed to capitalise on the "real interest happening in the market for colour".
The list prices have not been changed, only the distributor and reseller buying prices, although it is understood that most of the discount is being passed on to customers.
The Lexmark range of business colour printers includes the Optra Color 1200 and Optra SC 1275 lasers and the Optra Color 45 and Optra Color 40 inkjets, and the price cuts represent discounts from around $200 to more than $1000.
"These temporary price cuts will allow some resellers to retain a bigger margin," according to Clohessy, "and the discount will help resellers to close some orders in the lead-up to the end of the financial year."
Clohessy claimed that the promotion, which has been running since the start of April, has produced encouraging results already. A year-on-year sales comparison for April saw an increase of 60 per cent across the product category, with the Optra SC 1275 (mono and colour) achieving an 85 per cent jump.
The dual mono and colour laser is proving to be an interesting product point, which sees the 12ppm (page per minute) mono, 3ppm colour Lexmark product up against the Tektronix 16 and 5ppm 740 and HP's 16 and 4ppm 4500.
As well as supplying direct to selected resellers, Lexmark's business colour printers are distributed by Tech Pacific and ITG. "Our margin structure has remained unchanged during the special," said ITG managing director Braham Shnider. He confirmed that they had seen a sales jump in this category of the Lexmark business and that the full discount was being passed on to its reseller customers. Despite the intense competitive pricing pressure, he felt that the resellers were retaining some of the additional margin on offer and this was proving to be an effective incentive.
Business colour booming
The business colour printer market is emerging as the fastest-growing segment in the printer spectrum, according to Tektronix sales manager David Bates. He confirmed that there has been a huge jump in the segment. "We're seeing at least a 60 per cent level of growth in this market. We'll sell more printers in the last third of the current fiscal year than for the whole of last year," he reported. And the colour printer specialist is working off a significant base of resellers and sales. Bates claimed that, in the last year, Tektronix has added more than 100 resellers that have not previously sold its products.
"Although the cost of colour printers has come down, it is not the major selling factor. Resellers are doing a good job of bringing attention to affordable colour printers, but the major selling point is quality, Bates added. "There are products on the market with printer engine technology that is now two or three years old."