Xerox Breaks The mould
Published January 16, 2008 at 1:47 pm · Filed under Features
Colour for the price of black and white is the enticing prospect held out by Xerox’s new Phaser 8860 printer and MFP.
Xerox has broken ranks with the prevailing razor/razor blade pricing model by selling its two new solid ink colour printers at a high (i.e. realistic) price and then charging much less for the consumables. This contrasts with the normal practice in the printer industry of selling hardware cheaply or below cost and then making money on the supplies.
With base prices of £1,699 and £2,919 respectively, the Phaser 8860 and Phaser 8860MFP cost more than colour laser printers/MFPs in the same speed range. However, colour consumables are much cheaper, leading to a lower total cost of ownership for businesses printing between 1,000 and 10,000 pages per month.
The mono cost per page of just over 1p is comparable to many laser printers, but the cost per colour page is substantially lower at just 2p (based on 5% coverage of C, M, Y and K). This is five or six times lower than the cost per colour page on some entry-level MFPs.
Xerox has calculated that over a four-year period, a customer who prints a monthly average of 4,000 pages at a ratio of 70% colour and 30% mono can achieve savings of 50% compared to the total cost of ownership (TCO) of equivalent colour laser printers.
Darren Cassidy, director and general manager of Office Group Xerox (UK), told Business Info that there was nothing artificial about the pricing of the Phaser 8860 and its supplies, and that the prices merely reflected advances that Xerox had made in solid ink technology.
One of the most significant results of the $496 million Xerox has invested in the technology in the last four years is longer lasting wax sticks, which now have a yield of 14,000 pages. With colour sticks costing £48 each, this produces a cost per colour (at 5% coverage) of 0.34p. The mono stick costs £144 for a cost per print of 1p.
Cassidy also disputes the notion that the Phaser 8860 is an over-priced machine. To make his point, he refers to Xerox’s best selling WorkCentre 7132 A3 laser MFP, which has a base price of £4,294 and in 14 months has captured 26% share of the 1-10ppm colour MFP market.
While conceding that the 7132 is an A3 machine, he points out that the Phaser 8860 has the same functionality and controllers as the WorkCentre, automatic duplex (double-sided) printing, a 750MHz processor, true Adobe PostScript 3, Pantone Colour and a draft print speed of 30 pages per minute in mono and colour, compared to print speeds of 8ppm (colour) and 32ppm (mono) on the 7132.
On this basis, Cassidy points out that the price of £2,919 is a fair reflection of what you get. “It’s not an inflated price,” he declared. “The Phaser 8860 stands out as a bit of hardware in its own right, and is well priced for what it does.”
That being said, the base price of £1,699 and £2,919 for the printer and MFP respectively does look expensive compared to comparable A4 colour lasers, so in order to be successful buyers will have to break with the prevailing model of cheap hardware and expensive supplies.
To date, this is something that they have seemed reluctant to do and manufacturers that have tried to set a reasonable price for their devices have been forced to lower hardware costs in order to compete effectively.
However, Cassidy is confident that Xerox resellers will be able to persuade buyers to look at the total cost of ownership, just as they have encouraged people to make the transition from analogue to digital printers and from mono to colour printing.
“We have a channel that is used to selling something to people that they don’t already have. The old copier and now IT channels are used to selling the value of products, the premium that comes from Xerox technology,” he said.
Another factor working in Xerox’s advantage is growing environmental consciousness. Xerox’s pricing is arguably more environmentally responsible, as it reflects the true value of the printer, making it more likely that businesses will get maximum use out of the device before disposing of it.
On top of this, solid ink technology itself has strong environmental credentials. Being a cartridge-free technology, it requires very little packaging and produces 90% less waste than laser printers.
* Xerox also announced three new colour laser devices, the Phaser 6180 MFP (20ppm colour/30ppm B&W), and the Xerox WorkCentre 7232/42 (10ppm colour/32 and 40ppm B&W) A3 multifunction printers. They have starting pries of £746 and £3,752 respectively.
0870 873 3873 or visit http://www.xerox.co.uk/
