Lexmark Trade-In Rebates Take Aim At HP Printers

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Sensing a soft spot in Hewlett-Packard's printer business, Lexmark International has unveiled a trade-in promotion that awards a "bounty" for switching from certain HP color printers to Lexmark models.

Lexmark launched its salvo hours after HP unveiled the Color LaserJet 4600, a 17-ppm printer that is the company's first in-line or tandem printer. With tandem printing, four print cartridges are stacked on top of one another to deliver ink to paper in a single pass.

Roger Jakobs, marketing manager at Sotis Business Equipment, a Lexmark solution provider based in New York, said the trade-in discounts could be a "shot in the arm," given the soft market. "We've been moving more color printers, particularly with the advent of better pricing," he said.

The Lexmark promotion is aimed at chipping away at HP's printer sales, a key component of its $87 billion merger with Compaq. For the first quarter of 2002, HP owned 65.5 percent of the monochrome printer market, with Lexmark a distant second with 17.3 percent, according to Gartner Dataquest. In color printers, HP controlled 44.2 percent of the market, while Xerox and Minolta-QMS had about 20 percent each and Lexmark had 6.9 percent.

Matt Dollus, senior manager for U.S. product marketing at Lexmark, said customers are at a crossroads with existing printers. "The market is moving very rapidly to in-line color laser printers because of very aggressive pricing," he said.

Dollus said that while the program wasn't created to take advantage of HP while it completed the Compaq merger, the timing was a contributing factor. "It is a ripe marketplace," he said. A Lexmark spokeswoman later downplayed the use of the word "bounty" in the trade-in announcement, calling it "poetic license."

Kurt Rockenhaus, North American LaserJet manager at HP, said Lexmark's action was "borderline desperation. Why would they use such a word? The timing, scale and wording says to me that they are clearly very concerned [about the LaserJet 4600, and they should be," he said.

Lexmark said it will issue solution providers rebates ranging from $300 to $1,200 when customers trade in HP's 4550, 4500 or 8550 printers for Lexmark's C750, X750e multifunction printer or two versions of the C910.

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