Lexmark has announced they are exiting the inkjet printer business as part of a $160 million restructuring program, resulting in the layoff of some 1,700 employees. The decision is expected to save $85 million next year although the company says they will continue to offer support, services and supplies for printers already in the wild. Lexmark plans to honor warranty claims as well.
With their departure from inkjet printers, Lexmark will now focus on enterprise products such as multifunction printers, managed print services and content management. These are considered to be higher-margin lines whereas inkjet printers represent a lower margin. Sales of inkjet supplies can bring in extra revenue but it’s not enough to be sustainable.
Printers, especially those at home, are being used less frequently thanks to the growing popularity of digital devices like smartphones and tablets. Furthermore, consumers are electing to store their images digitally instead of printing pictures to place in photo albums.
In related news, Sony has announced plans to exit the optical disc drive business as part of an ongoing restructuring effort. Sony Optiarc, a subsidiary that is responsible for making Blu-ray and DVD drives for computers, will shut down operations in December. The venture will officially be dissolved by March 2013. The 420 employees (90 from Sony Optiarc and 330 from overseas affiliates) will be offered jobs in other divisions or given the opportunity of an early retirement package.
Much like the printer business, Sony’s exit from the optical disc drive market is a sign of the times. Furthermore, the once lucrative business has all but dried up as multiple manufacturers now sell Blu-ray and DVD drives – a market once dominated by Sony.