Date: April 14, 2012
New York, NY -- A Boston-based market analysis firm, Trefis, has recently predicted that Lexmark will look at their MPS segment to counteract “ ‘declining margins’” reports The Recycler.
As we’ve long reported, the MPS industry is one the is due to experience reasonable growth up through 2014. Lexmark is viewed by multiple sources as one of the industry leaders in addition to Xerox and HP. Many businesses are choosing to go the MPS route so more time and energy can be spent on their respective products and operations, rather than on keeping abreast of which toner needs replaced and which printer is jammed. Under Lexmark contracts, they handle supply management in addition to maintenance. Even city and state governments and government agencies are choosing the MPS route to cut costs and make it possible to provision more services to their citizens.
Lexmark recently announced a five-year, $50 million MPS contract with the U.S. Department of Agriculture (USDA) and has helped companies such as Columbia Sportswear to improve their printing infrastructure. Lexmark has also further shown its commitment to MPS by acquiring companies such as Perceptive Software and more recently, ISYS Search Software and Nolij.
Trefis believes that while this move may help Lexmark’s declining finances in the near future, it may only be temporary fix. They said:
“‘This is, however, a stop-gap solution and is only a matter of time before services start facing margin pressure. To be sustainable, Lexmark will have to find a niche where it can retain pricing power’”.
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