Xerox strategy focuses on colour products

Xerox Corp is betting its future on a more colourful business world.

The Stamford-based maker of printers and copiers is launching new products geared at allowing small- and medium-sized businesses to produce photo-quality colour documents.It's part of what the company calls the second phase of its colour strategy.

'Colour is no longer a 'nice to have',' Xerox chief executive Anne Mulcahy said ahead of Wednesday's launch in San Francisco. 'It's a smarter, more effective way to communicate and add value to information.'
Xerox struggled with mounting debt and competition a few years ago but has since returned to profitability, led in large part with sales of colour products.

The move intensifies Xerox's competition in the office market, one of the last bastions of black-and-white printing. Xerox is hoping its new products will help increase the number of pages printed in colour by businesses from three per cent to 10 per cent in the next three years.

Companies such as Xerox generate five times as much cash per page with colour compared to black and white.

As part of its strategy, Xerox is counting on the use of its patented solid ink technology, which eliminates traditional printer cartridges. The process involves loading a colour crayon-like substance into a printer, which changes from solid to liquid and then again to solid when it hits the paper.

Xerox on Wednesday planned to announce the first use of the solid ink technology on an office multifunctional device that copies, prints, scans and faxes documents.The product is aimed at smaller and medium-sized businesses, a segment Xerox has historically had trouble reaching.

This strategy makes sense, but they could face substantial competition from companies such as Canon, Ricoh and Hewlett-Packard puts pressure on the prices Xerox can charge. Shannon Cross, principle of Cross Research in New Jersey, cautioned that there could be a backlash by businesses that don't want to spend so much on producing colourful documents.