The ColorQube 9200 Series represents a major push by Xerox to boost profits by making color printing less expensive so customers will use it more. In addition, Xerox is looking to lure customers from competitors by claiming its systems are more green.
The ColorQube uses ink made of a nontoxic waxy substance that resembles a large crayon. Solid-ink technology is not new. Xerox has been using it for more than a decade. So the innovation in the new system is in the pricing.
On average, companies pay 2 cents a page for printing black and white and 8 cents a page for color, irrespective of how much color is on the page. Just placing a company logo in color on a page boosts the cost to 8 cents.
Xerox tosses this traditional pricing model and charges customers for the amount of color they use. For example, if a page has only 1.2% of color coverage or less, such as a logo or small graphic, then the customer pays the same price as for black and white, which is a penny a page. Coverage from 1.2% to 8% costs 3 cents a page and more than 8% is 8 cents a page. Such pricing, according to Xerox, reduces the cost of color printing by 62%, compared with color laser printers.
Xerox's other selling point for the ColorQube is its environmental friendliness, when compared with the average laser printer. Solid ink, which doesn't require cartridges and is fully consumed, produces 90% less supply waste, according to Xerox. The company also claims that the ColorQube uses 9% less energy over the life of the system and produces 10% fewer greenhouse gases.
However, there are trade-offs with the ColorQube. While print quality and color vibrancy are "very good," laser has an edge and is better suited for printing on photo paper and for serious graphic arts, IDC analyst Angele Boyd said.
In addition, ColorQube has some risks for Xerox. First, the company won't expand its color-printing business if customers only swap their laser printers for the solid-ink model, Boyd said. And Xerox needs to boost its color revenue.
In the first quarter of the year, Xerox saw color revenue drop to $1.37 billion from $1.6 billion in the same period in 2008. Contributing to the drop was the economic downturn, which resulted in a decline in the overall market's volume in color pages, IDC said.
Another risk for Xerox, which leads the color-printing market, is the potential response from competitors, such as Canon, Ricoh, and Hewlett-Packard. They could lower their prices, making the ColorQube less attractive.
Overall, ColorQube "reinforces the Xerox brand as innovative and color as one of its key strategic planks, and opens doors to more customers, green focused and/or looking for lower color operating costs," Boyd said in a research note.
"Nonetheless, until color hardware prices are nominally higher than black/white lasers, the adoption curve of color in the office will continue to be evolutionary and not revolutionary," Boyd said.
The ColorQube comes in three models: the 9201, which prints color at 30 to 60 pages per minute; the 9202 at 35 to 70 ppm; and the 9203 at 38 to 85 ppm. Pricing ranges from $23,000 for the 9201 to $29,000 for the 9203.
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