Dell to Launch Office Color Printer in Japan

By Reuters Posted 18 July 2006 @ 09:56 pm EET     Print     Reprint     E-Mail     Comments

TOKYO (Reuters) - Dell Inc. the world's top personal computer maker, said on Tuesday it would enter Japan's office-use color printer market with products priced around half as much as those of its competitors.

This may come as a blow to Japanese rivals, including Canon Inc. (7751.T) and Ricoh Co (7752.T) whose growing sales of color office printers have been supporting their profits, and these competitors' shares fell more than the broader market by midday.

Color office printers are far more profitable than monochrome models as they typically consumer more toner and command a higher selling price.

Japan's color laser printer market has been growing around 20 percent annually and now stands at around 300,000 units a year, according to Nihon Keizai business daily.

Merrill Lynch estimates Xerox Corp. holds a 30 percent share of the domestic color laser printer market, followed by Ricoh's 25 percent, Canon's 20 percent, Konica Minolta's (4902.T) 5 percent and Seiko Epson Corp.'s (6724.T) 5 percent.

Texas-based Dell, whose direct-sales business model that bypasses retail stores has helped propel it to the No. 1 spot in worldwide PC sales, would use the same strategy to sell the new color laser printer, a Dell spokesman in Japan said.

Analysts say, however, that the impact from Dell's entry on competitors is likely to be limited.

Daiwa Institute of Research analyst Hirokazu Mitsuta said Dell's sales tactics might not fit Japanese companies, and added it may see slow sales in a market where its rivals' sales agencies are strong.

"It would probably be difficult to attract large companies just by low prices because they will eventually need support from the makers, such as with maintenance and toner changes," he said.

"We expect a limited impact in the domestic market, but if you think in worldwide terms, there certainly are companies -- especially smaller ones -- that buy printers directly from makers," he added. "So Dell cannot be ignored in the global market as we expect its market share to continue to rise."

Dell's new office product, which can print 17 pages per minute in color and 30 pages per minute in monochrome, will be priced at 89,800 yen ($770), against around a 200,000-yen price tag on similar competing products.

By midday, shares in Canon were down 2.9 percent to 5,330 yen, while Ricoh had fallen 3.7 percent to 2,215 yen. Fellow Japanese printer maker Seiko Epson (6724.T) was down 3.6 percent at 2,715 yen.

All three were underperforming the Nikkei average (^N225 - news), which was down 1.67 percent.