Canon Challenges HP, Xerox, and Lexmark in Slow-Moving Printer Market

Strategic Insights -

Canon, a U.S.-based company, has been competing with Xerox in the market for high-speed copiers. Now, they are targeting HP, Xerox, and Lexmark in the market for slower, cheaper printers. By introducing four new printers with list prices under $15,000 and partnering with distributors like Ingram Micro and Pinacor, Canon aims to expand its dealer network to include small retailers and dealers. This move is expected to increase the availability of Canon's products, making it a major player in the printer market.

Key Takeaways:

  • Canon plans to introduce four new printers with list prices under $15,000, targeting HP, Xerox, and Lexmark in the printer market.
  • Canon will partner with distributors like Ingram Micro and Pinacor to stock and ship the printers as needed, aiming to increase the availability of its products.
  • By using distributors, Canon can make its products more widely available, helping it to compete with HP and Xerox.
  • Hewlett-Packard and Xerox have been flooding the market with products in all price ranges, using direct sales or authorized dealers and distributors to reach customers.
  • Canon's main customer for printer engines, Hewlett-Packard, may be impacted by Canon's decision to use its own branded products.
  • Canon may want to sell its own brand of toners and cartridges, which are the most profitable products in the printer business.

Statistics:

  • Canon has introduced four new printers with list prices under $15,000.
  • Hewlett-Packard commands less than 5 percent of the small-printer market.
  • Xerox sells the most expensive sophisticated devices through direct sales or authorized dealers, while cheaper plug-and-play products are pushed through distributors.

Sources:

  • Tracie Sokol, Canon general manager, citing the benefit of using distributors: "Distributors can make Canon's products more widely available, and that will help it be a major player in this arena."
  • Edward Lee, Lyra Research analyst: "Distributors won't ship Canon products until customers start asking dealers for them, and the dominant brand in the marketplace is still H-P."
  • Timothy Haney, Hewlett-Packard general manager: "Our printers come with software and an ability to connect to a network, and those are a lot more important than the engine."
  • Kevin A. Shea, Xerox senior vice president, citing the difficulty of getting distributors to sell their products: "You've got to spend millions on advertising, direct mail, and promotional pricing to get that distributor's phone to ring."
  • Jack L. Kelly, Goldman, Sachs & Company analyst, expressing doubt about Canon's entry: "It will not substantially change its status in this industry."