Konica Minolta, H-P join in copier business
By Mariko Ando, CBS.MarketWatch.com
Last Update: 8:55 AM ET Aug. 27, 2003
TOKYO (CBS.MW) -- Konica Minolta Holdings on Wednesday announced a tie-up with U.S. computer and printer maker Hewlett-Packard to jointly develop digital multi-function copiers.
Hewlett-Packard, Konica Minolta join in copier business
The Japanese photo film and copier maker will make office-use digital copiers and supply them to H-P (HPQ: news, chart, profile), which will sell the products through its sales network under its own brand. The two companies plan to release about five models of copiers over the next three years, with the first slated to appear in stores worldwide this fall.
"The agreement will likely to help boost H-P's presence in the office-use digital copier markets, and probably help it fill a gap between front-running rivals such as Dell (DELL: news, chart, profile)," said Konica Minolta spokesperson Katsuyuki Sakai.
Sakai declined to provide financial projections, but the Nihon Keizai Shimbun newspaper said the alliance is expected to help Konica Minolta generate additional revenue of 10 billion yen ($85.4 million) in the first fiscal year and more than 100 billion yen in fiscal 2006. Production costs will also likely be cut, by as much as 30 percent, according to the report.
On Wednesday in Tokyo, Konica Minolta's shares (JP:4902: news, chart, profile) rallied 4.1 percent, or 59 yen, to close at 1,500 yen.
Hewlett-Packard's shares advanced nearly 1 percent to close at $19.58 in New York on Tuesday.
The alliance is Konica Minolta's first major strategic step after the company was created earlier this month through a merger of Konica and Minolta -- a bid by the companies to boost their market share in a cutthroat market.
Canon (CAJ: news, chart, profile) leads the global copier market with a roughly 32 percent share, followed by Ricoh (RICOY: news, chart, profile) with 11 percent and Xerox Corp. (XRX: news, chart, profile) with 10 percent.
By comparison, the combined share of the market held by the copier operations of the pre-integration Konica and Minolta entities was slightly less than 10 percent, and HP's copier business is very small, according to a Nihon Keizai report.
Mariko Ando is a Tokyo-based reporter for CBS MarketWatch.com.
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