Unit 1 Micro: Falling demand prompts Lexmark to exit inkjet market

I have always thought that ink jet printers were an expensive and inefficient luxury - the high cost of consumables has always been a source of frustration and annoyance.

It seems now that the demand for ink jets is on a steep downward path as cheaper and frankly better substitutes are chosen. Far fewer people are printing out their photos and choose instead to post onto social media sites such as Facebook and Twitter. For those who prefer a hard copy of a photo, laser printers have become a much more cost effective and affordable alternative to ink jet printers.

Lexmark has announced that it is leaving the market for ink jet printers and focus instead on selling laser printers, imaging software and document management services.

Restructuring the business will be costly for Lexmark - over a tenth of the workforce is expected to be made redundant and the business has set aside $160 million for the process. They hope to recoup some of the money by selling to rivals over 100 patents linked to the ink jet printing industry.

The ink jet printer market is an oligopoly - Hewlett Packard (HP), Canon and Epson which account for 90% of inkjet sales worldwide. HP has been suffering too - it reported a quarterly net loss of $8.9bn, the largest in its history, as revenues from their computing businesses fell by more than 20% in the last three months.

Lexmark’s departure from the market will not be mourned, it offered a workhorse product that was always susceptible to the creative destruction of new media