Competition between digital imaging giants Hewlett-Packard and Xerox will force small competitors out of business, according to Xerox chief executive Paul Allaire.
In an exclusive interview with 'VNU Newswire' at the Comdex/Fall show yesterday, the head of Xerox said few other copier companies will be able to make the transition to digital products because they will not have the economies of scale, reseller partners or technology to compete.
Allaire refused to predict which companies will survive or die, but sources said Canon and Ricoh appear to be holding market share as businesses move from analogue photocopiers to digital printers and mopiers. Mita and Panasonic are also trying to compete in the digital copier and printer market but smaller firms may suffer.
Allaire said: "Some traditional copier vendors cannot make the transition. Four or five companies will dominate."
The top five copier companies hold 60 per cent of the market and the rest is up for grabs, Allaire said, because few companies have the quality, price competitiveness, channels and financial backing to succeed in the digital market even if they can make a good component. "The rest will go away. Customers also want global presence," he said.
Xerox should succeed as it has more computer-related sales than its copier rivals, though Allaire admitted HP has a lead in the computer business. "Big companies will succeed because they can make boxes that work with everything else. People need to know they will not bring the network down," he added.
Despite strong sales in the UK, Allaire admits Xerox' European business is weak and he hopes to improve its figures in France and Germany by recruiting resellers. He met European business leaders two weeks ago and concluded that currency conversions may continue to damage Xerox's figures in 1998. He also admitted Xerox will not be able to manufacture enough to meet demand until after Q1 1998.
Xerox has not made an acquisition for many years but Allaire said the company will buy any technology it cannot easily develop itself.
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