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Xerox to stop selling wide format products in North America by end-2011

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Xerox, the Connecticut-based household name in document imaging, is pulling out of the wide-format equipment business in the USA and Canada.

Xerox claim that Europe and developing markets will be unaffected by this decision. We're not so sure. The USA has traditionally been the engine that pulled Xerox's innovation along. Will Xerox now take its wide format lead from Europe?

Xerox 6604 System

Some background
On 1st March 2011, a tele-conference was held between Xerox and some of its North American wide-format equipment dealers. Xerox annnounced that its wide-format line was to be discontinued once its inventory was depleted. This story quickly leaked out as a wide format industry rumour. Later the same day Scott Frame, vice president Wide Format, Xerox Corporation, released the following statement.

"Xerox will stop taking orders for wide format products in the US and Canada in 2011, with specific timing based on inventory levels. Xerox’s European and Developing Market operations will continue selling wide format products and will source new products.

"Xerox prioritizes each investment, allocating research and development dollars to areas where the company can deliver the best value to the marketplace. As a result of this practice, Xerox has opted to not invest in wide format product engineering in 2011. Customers will continue to have access to service support, supplies, media and parts from Xerox for their existing equipment for a minimum of five years from the last install of a particular product line. Customers with questions can contact their Xerox Account Manager."

All direct North American sales representation and the Xerox dealer channel ceased forthwith on 1st March 2011.

Xerox 6604 System
The Xerox 6604 with integrated
Colortrac SmartLF Ci 40 wide format
scanner (rated "OUTSTANDING" by BERTL).

Xerox does not manufacture wide format equipment itself, but buys it from a variety of vendors, (OEMs), including Fuji Xerox (wide format printers) and Colortrac (wide format scanners). Xerox did not say what the impact of this decision would be on its work force. However, it will certainly have come as a shock and a disappointment to its loyal large format resellers who sold Xerox products exclusively. Over the years, many of these resellers made a very good living selling Xerox wide format equipment at high prices.

Xerox Corporation is a $22 billion leading global enterprise for business process and document management. It describes its broad portfolio of technology and services as providing "the essential back-office support that clears the way for clients to focus on what they do best: their real business." In May 2010 Xerox projected that, by 2011, full-year revenue will be approximately $24 billion, and is expected to grow to $25 billion in 2012. Will those figures now be revised downward?

What the market is saying

Rival product suppliers clearly see this as an opportunity.

Milwaukee-based Tom Taubenheim, President at A/E Graphics & Epic Color Group and an Océ reseller, blogs that "the bottom line to this story is that while a strong small format player particularly in the color arena, Xerox was not able to gain momentum over the last 5-10 years with their products and was really the odd man out, so to speak. Océ was and still is the oldest and largest wide format equipment manufacturer in the world. Their products are in over 60% of architectural, engineering and construction companies...and for a couple good reasons: dependability and reliability."

Another blogger, Reprographics' Joel Salus, comments on how the current economic recession might have influenced Xerox's decision to quit wide format. "Prior to this recession kicking in, the brands (in terms of wide-format black and white toner-based equipment placements) were ranked Océ, KIP and Xerox, in the US market. That's not the same in Europe, where Océ ranks No 1 and Xerox ranks No 2. (KIP is a distant 3rd in Europe.) I don't think the recession has changed this all that much, except that KIP has probably gotten hurt the worst overall, since KIP is only wide-format and since Océ and Xerox are more diversified, given their small-format products."

Most disappointed of all perhaps is Colortrac, the UK-based wide format scanner manufacturer who was OEM'ing its CIS-based SmartLF wide format scanners to Xerox. This relationship had barely got started when this news broke.

Scanners4CAD hoped that Xerox's decision to OEM Colortrac's large format scanners would increase its sales volumes and market share, thereby stimulating competition in the market through better, more affordable large format scanning solutions.

This development puts the brakes on Colortrac' OEM ambitions for the time being. It makes the market more dependent than ever on Contex, the world's largest wide format scanner manufacturer, as well as its OEMs, Océ and HP. While Xerox equipment was never cheap, bigger production volumes could have allowed Colortrac to reduce the cost of its wide format scanners, thereby putting further pricing pressure on Contex et al to give the market a more affordable wide format scanning solution. Ultimately, the loser is the CAD user looking for a better price on what is generally an expensive purchase.

Colortrac will want to work closely with Xerox’s European and Developing Market operations as they continue to "source new products". Colortrac will want to show Xerox Europe the value of maintaining an OEM agreement with them. A new and additional benefit not previously available from Colortrac is its new multi-language SmartWorks Pro scanning software which provides Xerox's European wide format resellers selling Colortrac scanners with a localized scanning solution in the major languages.

Still, it's not all plane sailing. We understand that Xerox Europe will now hand-over much of its wide format responsibilities to its major local distributors. With no lead coming from Xerox in the USA and Xerox in Europe passing the buck, many will be wondering if and when we will see a new generation of Xerox large format imaging solutions again?

For further information, contact:

  • Tom Taubenheim,
  • President, A/E Graphics & Epic Color Group,
  • http://aegraphicsinc.blogspot.com/

  • Joel Salus,
  • Editor, Reprographics,
  • http://reprographics.blogspot.com/

  • Colortrac
  • www.colortrac.com

  • Xerox
  • www.xerox.com