Retrenchment - Lexmark Exits the Inkjet Printer Market

Do you still use an inkjet printer at home or at school? If so, you’re one of a dwindling customer base for the manufacturers and retailers of inkjet printers and accessories. And now there will be one fewer inkjet brands competing for the remaining demand. Lexmark has decided to exit the market; the move represents a significant retrenchment for Lexmark as it aims to refocus its business on more profitable market segments.

Lots of coverage of Lexmark’s decision in the business media today as well as Geoff’s excellent article over on the Economics blog.

Some key stats and quotes from the coverage are worth students adding to their research notes:

Lexmark will stop development of its inkjet technology by 2013 and close its inkjet supplies factory in Cebu, Philippines by 2015. 1,700 jobs will be lost as a result.

Once completed, the move will result in annual cost savings of around £60m p.a. (which tells you something about the losses that Lexmark has been incurring in the market). The one-off restructuring cost (factory closures, redundancies, contract costs etc) will be arond $160m

A one-off cash inflow (and profit) will also be generated by Lexmark’s sale of inkjet-related patents

The remaining competitive structure of the inkjet market will be an oligopoly: What remains of the market is dominated by HP, Canon and Epson which account for 90% of inkjet sales worldwide

Lexmark to stop making inkjet printers and cut 1,700 jobs