STAMFORD, Conn. Mar 30, 2005 — Xerox Corp. is betting its future on a more colorful 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 color documents.
It's part of what the company calls the second phase of its color strategy, in which Xerox says it is devoting two-thirds of its $1.4 billion annual research and development budget.
"Color 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."
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Xerox struggled with mounting debt and competition a few years ago but has since returned to profitability, led in large part with sales of color products. The company's color business amounted to $3.9 billion last year, or 27 percent of its total sales, up from 16 percent in 2001 when its color strategy began.
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 color by businesses from 3 percent to 10 percent in the next three years.
Companies such as Xerox generate five times as much cash per page with color 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 color 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.
Analysts say the strategy makes sense, but they caution that substantial competition from companies such as Canon, Ricoh and Hewlett-Packard puts pressure on the prices Xerox can charge.
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