Lexmark International announced on August 28. 2012 that it is exiting the inkjet printer business. The company will continue to provide service, support and consumables for owners of its inkjet devices, but will discontinue R&D and manufacturing of inkjet devices, effective immediately. This action is expected to save $95 million annually, while resulting in 1,700 layoffs, including 1,100 in its Philippines manufacturing facility and 550 at its Lexington, Kentucky headquarters.
This is not really surprising, as Lexmark has been attempting to sell the inkjet business for some time, and rumors of its exit abounded. Still, it is a shock to see a major player exit the market after more than twenty years of participation. The company had already abandoned the low end of the consumer market in 2008 and launched a line of improved business-class ink jets in 2009. But like its rivals in inkjet, Lexmark was unable to convince businesses – especially corporations – to abandon laser technology for inkjet. Inkjet printers made up only 5% of the company’s hardware revenue in 2012 to date.
Lexmark has also tried to find other applications for its inkjet technology, with very limited success. Its only major success came with OEM customer Dell, which most recently carried two Dell-branded Lexmark inkjet models.
It would seem to make sense for a printer company that lacks inkjet technology, such as Samsung or Seine (Ninestar of China), to acquire the Lexmark inkjet business, but with the consumer printer market in decline, apparently no one came forward. Perhaps someone will acquire Lexmark’s portfolio of inkjet patents, which numbers about 1,000 and is for sale.
Just last week, Kodak indicated that it does not consider its consumer inkjet line a core business and is likely to sell or close it. Kodak entered that market in 2007.
Tom Ashley, Pivotal Resources