Xerox to enter inkjet market with $2bn initiative

Xerox is today expected to announce a multibillion dollar initiative that it claims will provide a "triple threat" to rivals in the inkject printer market.

It is anticipated that the firm will make public its plans to invest more than $2bn over the next five years in developing a new line of inkjet printers with Fuji Photo Film and Sharp. Xerox already works with Fuji Photo in a 50-50 joint venture called Fuji Xerox.

The new inkjet printers will be at least 50 per cent faster than comparable products made by arch rival Hewlett Packard (HP) and use as much as 20 per cent less ink, according to US reports.

Ben Reitzes, an analyst at PaineWebber, said that Xerox was attempting to create a product line that would provide a higher speed, lower cost alternative to HP's inkjets, which range in price from about $100 to $800.

But Rob Enderle, an analyst at Giga Information Group, said: "Chasing any market leader from the back is not sufficient to offset what HP has achieved in the inkjet market."

He claimed that Xerox currently had no share of the inkjet printer market and neither did Sharp or Fuji. "They are non players in this market, and when you add zero plus zero plus zero, you still get zero," he said.

The two market heavyweights are HP and Epson, Enderle said, followed by Lexmark and Brother in the second tier.

"But HP is clearly the dominant player, and this announcement won't provide a competitive market," he said.

Xerox's fourth quarter earnings fell by 52 per cent in January to $294m, down from $615m in the year ago quarter. The company said at the time that things may not improve until the second half of this year.