updated 05:33 pm EDT, Tue August 28, 2012
Will focus on enterprise services, data manipulation
Lexmark is exiting the inkjet printer business and will be refocusing its efforts to improve profitability. As PCWorld details, the printer company is leaving the consumer sector to focus on more profitable endeavors, including higher-margin products like multifunction printers, managed print services, and software. As a result, the company will be cutting 1,700 jobs in total, including 1,100 in manufacturing.
Lexmark has adhered to the now-standard model in printer manufacturing, wherein companies make up for slim or negative margins on printers by selling cartridge refills and other supplies at a higher margin. That model, though, has proven difficult to sustain for the company, as it faces stiff competition from HP, Canon, Xerox, and other companies able to sustain their inkjet businesses through higher volumes.
Lexmark will now focus on enterprise products, which have a higher profit margin than consumer printing products. The company is also expanding its efforts in data capture and manipulation. Lexmark will look to develop its "intelligent capture" tools, which allow for machines to understand and organize information scanned from a variety of sources. Going forward, Lexmark's software offerings will be competing with the likes of HP and Xerox, and the company is said to be looking into acquisitions and partnerships enabling it to better compete.