Lexmark Exits Ink Jet Business

Lexmark International announced on August 28. 2012 that it is exiting the ink jet printer business.  The company will continue to provide service, support and consumables for owners of its ink jet devices, but will discontinue R&D and manufacturing of ink jet devices, effective immediately.  This action is expected to save $95 million annually, while resulting in 1,700 layoffs, including 1,100 in its Philippines manufacturing facility and 550 at its Lexington, Kentucky headquarters.

This is not really surprising, as Lexmark has been attempting to sell the ink jet business for some time, and rumors of its exit abounded.  Still, it is a shock to see a major player exit the market after more than twenty years of participation.  The company had already abandoned the low end of the consumer market in 2008 and launched a line of improved business-class ink jets in 2009.  But like its rivals in ink jet, Lexmark was unable to convince businesses – especially corporations – to abandon laser technology for ink jet.  Ink jet printers made up only 5% of the company’s hardware revenue in 2012 to date.

Lexmark has also tried to find other applications for its ink jet technology, with very limited success.  It’s only major success came with OEM customer Dell, which most recently carried two Dell-branded Lexmark ink jet models.

It would seem to make sense for a printer company that lacks ink jet technology, such as Samsung or Seine (Ninestar of China), to acquire the Lexmark ink jet business, but with the consumer printer market in decline, apparently no one came forward.  Perhaps someone will acquire Lexmark’s portfolio of ink jet patents, which numbers about 1,000 and is for sale.

Just last week, Kodak indicated that it does not consider its consumer ink jet line a core business and is likely to sell or close it.  Kodak entered that market in 2007.

 Tom Ashley