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Tuesday, July 18, 2006
Dell Enters Color Printer Business

Dell, the world's top personal computer maker, said on Tuesday it would enter Japan's office-use color printer market with products priced around half as much as those of its competitors.

This may come as a blow to Japanese rivals, including Canon and Ricoh whose growing sales of color office printers have been supporting their profits, and these competitors' shares fell more than the broader market by midday.

Color office printers are far more profitable than monochrome models as they typically consumer more toner and command a higher selling price.

Japan's color laser printer market has been growing around 20 percent annually and now stands at around 300,000 units a year, according to Nihon Keizai business daily.

Merrill Lynch estimates Xerox holds a 30 percent share of the domestic color laser printer market, followed by Ricoh's 25 percent, Canon's 20 percent, Konica Minolta's 5 percent and Seiko Epson's 5 percent.

Texas-based Dell, whose direct-sales business model that bypasses retail stores has helped propel it to the No. 1 spot in worldwide PC sales, would use the same strategy to sell the new color laser printer, a Dell spokesman in Japan said.

Analysts say, however, that the impact from Dell's entry on competitors is likely to be limited.

Dell's new office product, which can print 17 pages per minute in color and 30 pages per minute in monochrome, will be priced at 89,800 yen ($770), against around a 200,000-yen price tag on similar competing products.

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