Xerox Lowers Cost Of Color Printing For High-Volume Users - InformationWeek

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Xerox Lowers Cost Of Color Printing For High-Volume Users

The company turns the traditional printer pricing model upside down, by charging more for hardware and less for ink.

Xerox on Monday introduced a new printer that offers color for the same cost as black and white, giving high-volume users the option of paying more for hardware in exchange for a lower cost of printing throughout the life of the product.

The move could potentially change how printers are sold to business, because it gives customers more options in selecting the printer that best fits their needs, experts say. Up until recently, the industry followed a strategy of making higher profits through the life of the printer by offering inexpensive hardware, but selling ink at a high cost.

Xerox deviates from that strategy with the Phaser 8860 printer, which also is available in a multifunction version that combines a printer, scanner, and copier. The printer uses a "solid-ink" stick that's totally consumed, leaving nothing to throw away -- a feature Xerox claims is more environmentally friendly than comparable laser printers with toner cartridges.

The black ink stick costs $216, and three color sticks -- magenta, cyan, and yellow -- cost $72 apiece. Each stick -- whether color or black -- prints 14,000 pages. Printing speed is as fast as 30 pages per minute.

While the 8860's lowest price is about $900 more than competitors' comparable products, printing over the lifetime of the printer can be half as expensive, depending on the amount of color an organization prints, according to Xerox. The hardware is designed for businesses with print volumes between 1,000 and 10,000 pages per month, such as real estate agencies, marketing firms, design agencies, and contractors.

"It is definitely a game-changing pricing strategy for printers, because now you are really profiling your customers," Philip Grote, analyst for Current Analysis, told InformationWeek. Where a high-volume user who prints a lot of color may find the 8860 attractive, a user that prints mostly in black may still want to pay less for the hardware. The benefit in Xerox's strategy is the option to choose.

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