Printer prices plummet

In the months leading up to the government's peak buying season vendors aim to expand the market for color laser printers by slashing prices on many models by as much as 33 percent or introducing full-featured models at similarly low price points.

With the changes now showing up on General Services Administration schedule contracts and other vehicles federal buyers will be able to buy fully featured color lasers for $4 000 or less compared with some $7 000 not too long ago. For example Tektronix Inc. last month introduced the Phaser 560 color laser printer which costs $3 995 on the GSA schedule and $3 882 through the National Institutes of Health's Electronic Computer Store.

Likewise Hewlett-Packard Co. has dropped the list price for its Color LaserJet 5 from $7 495 to $4 999 - a 33 percent cut and Lexmark Inc. introduced a new Optra SC with a GSA price of $3 833 while cutting prices on older Optra models by 10 to 20 percent.

Lexmark is making "a full-court press to try to get these contracts modified as quickly as possible [for the buying season] " said Bill Errico national sales manager for the federal industry at Lexmark in Rockville Md. Its contracts include Desktop V through Hughes Data Systems and International Data Products Corp.

The new price points reflect an industrywide attempt to broaden the market for color laser printers printer vendors and resellers said.

"We are approaching the prices where we are going to see widespread adoption in the federal government with color starting to replace monochrome " said Roman Ferrer group manager for product marketing at Government Technology Services Inc. which resells printers from HP and Tektronix among others.

Lexmark and other vendors now are pushing to get new products and prices reflected on such governmentwide contracts as NIH's ECS and NASA's Scientific and Engineering Workstation Procurement II and such agency programs as the Department of Veterans Affairs' Procurement of Computer Hardware and Software.

"There is a direct correlation between the price of color laser printers and how many people are buying them " said Doug Hanson the SEWP II program manager at NASA. "I know here at NASA we are starting to see more color laser printers and it's because the prices are dropping and getting competitive with traditional black-and-white printers " he said.

Bill Aimsworth head of NIH's blanket purchase agreement branch said the new prices are beginning to show up although not yet on any vehicles. "I have a proposal in now [for a BPA] and there seems to be a difference from the range we have been paying " Aimsworth said.

Industry sources said the prices may fall further yet in this competition-sensitive market. Panasonic this summer is expected to introduce a color laser printer with a list price of $2 995.

"This has been a tight year for purchases so everybody is trying to be as competitive as they can be " said Earl Frawley government manager for reseller Westwood Computer Corp. Springfield N.J. Westwood resells a number of brands including HP NEC Lexmark and QMS Inc.

In many cases vendors such as Lexmark make such price cuts when they introduce newer models and need to clean up inventory. However in addition to lower entry-price points vendors also are making deals for more full-featured printers.

For example Tektronix's new Phaser 560 comes with PhaserLink printer management software which allows users through a standard World Wide Web browser to check the status of toners fusers and imaging units from their desks.

The Xerox C55 meanwhile has such features as "fax-friendly black " which will convert document colors into black-and-white patterns to make it easy to fax or copy the document without losing color-sensitive information. It also has the ability to detect transparencies and adjust the printer settings accordingly. Xerox introduced the C55 in May with a list price of $3 995.

In part industry vendors have been able to drive prices down because demand for laser color while still a small share of the total printer market is growing each year. Also vendors said the print technology itself has advanced making it less costly to manufacture.

The improved cost-effectiveness "is reflected in our prices " said Michelle Thomas federal channel sales manager for Xerox in McLean Va. "Our cost per page reflects that as well."

Ed Lee senior analyst with Lyra Research Newtonville Mass. said Lyra expects color laser to take off over the next four years but he said the recent drops may not sway many potential customers.

"The explosion will probably not happen at least for another year when vendors bring prices down one more step " Lee said.


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