Xerox Corp. is making over a classic line of copiers and printers as part of a broader effort to attract cost-conscious educators and other customers looking for new imaging technology.

Xerox, which announced the new offerings Jan. 29, said the products include five new printing and imaging systems based on what it called two breakthrough technology platforms. The new platforms allow the products to be manufactured more cost effectively and improve the speed of the scanners, the quality of the images produced, and the price, Xerox said.

The company’s products have long been a staple of schools, where the need for high-volume, low-cost printing and scanning is essential.

The new offerings include the first major redesign of the company’s DocuTech products in more than a decade. The DocuTech line, introduced in 1990, was Xerox’s first venture into digital printing from traditional offset printing.

At up to 120 pages per minute, the new products represent “the fastest scanners on a printer-copier in the market,” according to Xerox public relations manager Karen Stroh.

Stroh said she expects the upgrades will prove especially useful in schools, where high-quality copies and additional scanning features are necessary to produce the vast array of educational pamphlets, forms, parent notices, newsletters, quizzes, tests, and worksheets distributed throughout the year.

The DocuTech 100 and DocuTech 120 machines produce black-and-white copies and print at a rate of 100 and 120 pages per minute, respectively. The 100 model starts at $77,000, but educators should expect to pay up to $99,000 for the higher-end 120 version, Stroh said. Both DocuTechs are designed to bridge a gap between light production copier/printers and heavy-duty systems by offering features previously available only on high-end equipment.

Stroh said the machines, which are built to print an average of 500,000 copies per month, are ideal for schools and universities looking for a top-tier product at a mid-market price.

Xerox simultaneously rolled out two other office printers, the Phaser 4500 black-and-white laser printer and the Phaser 7750 color laser printer. The 7750 represents the first color printer derived from a new solid-ink technology designed to improve image quality, the company said. Both sell for under $1,000. Xerox has introduced 38 new products in the past two years as part of a strategy that has returned the company to profitability. On Jan. 27, the Stamford, Conn.-based maker of printers and copiers reported fourth-quarter profits of $222 million, compared with $19 million for the same period a year ago.

Market analysts predict the new products will address a growing need in the marketplace.

“It’s about time,” said Andrew Johnson, vice president of research at Gartner Inc., also of Stamford. “There is some pent-up demand for these types of products.”

Competitors, including Canon and Ricoh, began to gain market share against Xerox in the late 1990s. The new products will help Xerox defend against the competition by offering printers with more features at a comparable price, said Charles Pesko, managing director at CAP Ventures, a research company whose clients include Xerox and its competitors.

“I think it’s going to raise the bar,” Pesko said of the company’s announcement.

Gartner’s Johnson, who predicted strong initial demand, said he’ll watch to see how Xerox’s distribution channel works in selling the products. Xerox has had trouble in the past with sales.

The new offerings are timely because they come as corporate spending for printers and copiers is expected to pick up, Johnson said. The products also respond to a trend by businesses to centralize their printing and copying by relying on fewer machines that produce greater volume, he said.

Xerox also is stepping up its consulting services designed to help schools and businesses cut costs and improve productivity.

Though Xerox has yet to announce special pricing incentives for the education market, Stroh did say the company is open to negotiating costs based on the size and scope of certain orders.

Links:

Xerox Corp.
http://www.xerox.com

Gateway to buy PC maker eMachines in $235 million deal
From eSchool News staff and wire service reports

In its latest attempt to find profits in the notoriously low-margin personal computer business, Gateway Inc. is buying privately held eMachines Inc. in a deal valued at $235 million.

The combined company would still trail Dell Inc. and Hewlett-Packard Co., but executives hope the increased volume will give it more leverage in negotiating with suppliers. A similar argument was made when HP announced it was buying Compaq Computer Corp. in 2001.

“There’s an element of last man standing here,” said Roger Kay, an analyst at the research firm IDC. “The PC industry is definitely consolidating and, at this stage, bulk counts.”

Gateway and eMachines each had about 3.4 percent of the total U.S. computer market in the fourth quarter of last year, according to IDC. By comparison, Dell and HP commanded more than half.

The agreement, announced Jan. 30, came a day after Gateway posted its 12th loss in 13 quarters, a result of sharply declining sales and charges related to its makeover from a personal computer maker to a consumer electronics company.

Gateway’s revenue last year was little more than one-third what it was in 2000. The company introduced a raft of flat-panel TVs, cameras, and music players last year, but lackluster holiday sales failed to validate its decision to branch into consumer electronics, market analysts reported. The performance of the education division at Gateway has been a bright spot, company officials said.

Last year, Gateway’s overall PC shipments fell 24 percent to just under 2.1 million units. eMachines shipped 1.9 million PCs last year, meaning the transaction would effectively double Gateway’s overall PC business.

Ted Waitt, who founded Gateway in 1985 and returned as chief executive in 2001, said skepticism by analysts about the future of the company’s PC business, which still accounts for about 70 percent of its revenue, “basically gets answered” by the acquisition.

Once the deal is closed in about six to eight weeks, Waitt will be replaced by eMachines’ CEO, Wayne Inouye. Waitt, 41, will remain Gateway’s chairman. Inouye, 51, was senior vice president of computer merchandising at Best Buy Co. before joining eMachines in 2001 to turn around the then-struggling company.

The two companies, which began negotiating about a month ago, have targeted different customers. eMachines employs only 138 people, mostly in Orange County, Calif., hiring outside firms and selling its lower-end PCs through major electronics retailers, including Best Buy, Circuit City Stores Inc., and Wal-Mart Stores Inc.

Gateway, which employs about 7,500 people, sells its higher-end gear at its shrinking chain of 190 stores, over the internet, and by phone.

Gateway declined to say whether eMachine’s lean operating structure would result in additional layoffs. Gateway, which employed 25,000 people in 2000, recently stopped manufacturing its products–except for some large, custom accounts–and hired outsiders to handle everything from shipping to employee benefits.

Irvine, Calif.-based eMachines had revenue of $1.1 billion last year and has been profitable for nine straight quarters. The company declined to provide additional financial information.

Gateway, based in the San Diego suburb of Poway, had revenue of $3.4 billion last year. It said it expected to return to profitability in 2005.

Links:

Gateway Inc.
http://www.gateway.com

eMachines Inc.
http://www.emachines.com