Dec (12-02) - Lexmark's toner gamble

December 13, 2002 Editorial

Equipment specials:
Converting to TCP/IP from SNA? Check out this overview for printers:

Seems that the lawsuit brought by Arizona Cartridge Remanufactures Association (ACRA) against Lexmark is due to go to trial in October '03. ACRA represents industry toner remanufacturers who take offense at the restraint of trade issues regarding Lexmark's "killer chips" and "prebate" programs. It think they have a good case, but there have always been patent issues regarding aftermarket compatibles. I think it could go either way..... Lexmark is one of the first to license code from Levi, Ray and Shoup (LRS) that allows encryption of data over IP. More are sure to follow. LRS is also said to have a beta version of their IPDS over IP product due soon. This will be great news for all those companies currently using their robust host applications (e.g. VPS) who would like to migrate to IP and still support IPDS. Used in conjunction with the ACC line, it is sure to be a welcome enhancement and excellent alternative to IBM's PSF products....Lexmark's quarterly report states that 55% of their revenue is coming form supplies (give the razor, sell the blades)!

The large quantity of 10BaseT ethernet cards available from the IBM 4317 take-out is getting down to the end. I recommend action for those contemplating ethernet cards for their IBM NP printers (4312, 4317, 4320, 4324, 4332). Rumor has it that IBM may go back to manufacture another batch of the 10/100 cards. I would be very surprised, but you never can tell with IBM... I have also heard of a package of IBM 4322-001(aka InfoPrint 21) printers coming out. This is a strange case and deserves a review of the market dynamics that have created this "problem"....Just prior to IBM's agreement with Lexmark, IBM had introduced a new model to replace the IBM 4320-001 (20ppm, 11x17) printer. The new model 4322 was only on the market for a very short time before IBM introduced its new line based on the Lexmark T series (IBM 1100 series lasers). Hence, the 4322 was of limited production and had not reached critical mass in order to have fluid availability of machines, parts, supplies, etc. As a result, today the price of a 4322 is as much as or more than list price, just because there are so few machines available. The result is that now, a large package coming available will have to be priced very cheaply, so that a user could justify the potential lack of support, supplies, parts, and service likely to be available over the longer run. I, for one, would not recommend a product that has such poor market support characteristics. Considering that there are many excellent alternatives, there is not compelling reason to pay a premium for this printer.

Time is running out on Xerox maintenance and service for 4213's, 4235's, 4197's, and 4220/4230 with XES Server. After 12/31/02 Xerox is not supposed to be answering service calls on these models, unless Xerox continues to be desperate for cash... I implore you to call us quickly before the crises reaches fever pitch... We have an alternative to the Agile product which is easier to support and less expensive. Because of Agile's problems lately, I recommend a call to discuss your XES issues.

Tally has a new laser printer called the T9114 series which replaces their older 9412family. While known more for their impact printers, the are trying to get in to the lucrative supplies business by way of these entry level printers. Nothing spectacular.

GENICOM announced the cL160, (16 ppm, color and mono), as this market segment gets ever more competitive. They also have announced another member of their venerable 3800 series dot-matrix printer called the3811 (1100 cps). It competes directly with the CompuPrint-made IBM 4247-V03.

I-O Corporation has announced new enhancements to its 4000 series thin client line. It appears to be a solid and robust competitor to the CLI product line we favor. It offers many of the strengths of I-O's printer connectivity background into a nicely priced desktop entry for the growing thin-client audience.... I-O also announced the 5755e, a neat little protocol converter/print server that takes in IPDS data from IP and sends it back out as PCL. This is a nice feature for laser printers, but doesn't support impact printers.

Good supply:
IBM 3112 or 3912 � inexpensive workhorse with IPDS support
IBM 4320-001's. -- 48 left from that big package
IBM 4324-001's. -- 24ppm and up to 11x17 with IPDS, etc
IBM 4332's.-- There are a few IBM 4332-001 and -004 printers left in inventory now. They will save a FORTUNE in toner costs compared to the current lines offered by Lexmark or IBM. We have recently acquired some of the last new ones!
IBM 4161 Ethernets for 4312, 4317, 4320, 4324, 4332
IBM 4317-001 � still whittling down the huge supply
IBM 6262- all models except the "A" machines
IBM 4224-201 - you can add internal ethernet to these and they last forever.
IBM 4230-202, 5i3, 4i3 - have some new and some used on this current generation gear. (check out the internal ethernet for the 4230 family)
Genicom 3470 � New in box = less than the IBM gets for theirs.
Lexmark Optra 1855�s � over 100 pieces sitting (most with ethernet)
Lexmark Optra E --6ppm desktop lasers are a steal at @ with supplies
Lexmark external print servers. MarkNet 10BaseT. 4034-102 and 4034-103 (less than complete)
Lexmark Optra S1255, 1625, 1650, and 1855's are in good supply now, and the Optra T line's are starting to peek through in the secondary markets.

IBM 6400 models, especially higher end machines which can accommodate internal ethernet.
IBM 6262-A models (everyone wants ASCII)