TOKYO (Nikkei)--Ricoh Co.'s (7752) decision to acquire IBM Corp.'s digital business printer operation is part of a strategy designed to rapidly secure new sources of revenue.
For its part, IBM has been gradually concentrating resources in its flagship software and services businesses, while shedding its hardware operations at a fast clip.
Competition is intensifying in the market for copiers and other office equipment, with South Korean giant Samsung Electronics Co. making a major push in Europe and the U.S. The young digital business printer market is technology-driven, raising barriers to entry for newcomers. Ricoh, which entered the field through the 2004 acquisition of Hitachi Ltd.'s (6501) printer subsidiary, boasts state-of-the-art technology in products tailored for corporations.
The acquisition is aimed at taking possession of IBM's global sales and service network for the printers. Ricoh will be able to immediately boost sales by supplying toner cartridges and other consumables to the new customers. It may also give Ricoh a beachhead from which to attack Xerox Corp.'s stronghold in the market catering to printing companies.
On the other hand, the sale is part of IBM Chief Executive Officer Samuel Palmisano's structural reform plan. Since becoming CEO, Palmisano has focused on the lucrative software and services businesses while jettisoning the highly volatile hardware and multiuse-component operations. IBM sold its hard-disk-drive operations to Hitachi in 2003 and its personal computer business to China's Lenovo Group Ltd. in 2005.
(The Nikkei Thursday morning edition)
Wednesday, January 24, 2007
ANALYSIS: Ricoh Seeks New Revenue Stream From IBM Deal
Taken from Nikkei Net Interactive:
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