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I am interested in your thoughts and data points that can confirm or deny that Lexmark OEM toner and OEM imaging unit yields tend to be, in the real world, often well below expected stated volumes.

A real profit killer in cpc and MPS contracts.

fisher posted:

If I was a Lexmark dealer I'd be a cheerleader for A4 too. 

Fisher give them a call I am sure they would welcome you to the team. A4 will be the future for an extremely large portion of the current A3 population.  

I find it interesting that if you go to www.lexmark.com and search their website for "investor relations" or "financial statements" you get no response.

If you search the NYSE or NASDAQ you will not find Lexmark except in the past tense.

In the USA, Lexmark's Chief Financial Officer came from Huawei in 2017 and was first educated in Shanghai, China.

To be fair, most of Lexmark USA's Senior Executives and Board of Directors seem to be of the highest quality and American descent.

One has to conclude that Lexmark is a very well known and successful American global brand that is 100% owned by Chinese interests.  At least 5% is owned by the Chinese gov't.

I do understand where you are coming from in terms of your data that A4 MFPs are destined to displace A3 copiers at an accelerating rate.

I also agree that A3 copiers vendors need to step up their game in terms of  IT support and capabilities.

A3 vendors still hold a couple of cards that IT centric print resellers do not have.

1). Feet on the street, experienced outside sales reps who can make 20 cold calls a day.  We are in the B2B business which to some people means belly to belly

2). Sophisticated, lease portfolio and CRM management tools that help guide sales reps to be at the right place in time to close a sale. 

3). Solid cpc data over a pay as you go A4 service model.  I know A4s have cpc models as well but you have to build in some generous padding on the toner and parts yield because that is where the A4 manufacturers hope to make their profit.

4). I suspect that a lot of your data claiming low maintenance is based upon simple paper paths. A3 product tends to have more paper handling features that many customers require.

 

Back to the original topic suggesting that HP should buy Xerox.  Fujji Xerox would probably say not so fast. We have a say in this.

SalesServiceGuy posted:

I am beginning to realize that one of the best tools to use when offering a customer both an A3/ A4 proposal is a longer term lease.

Many A4 devices begin to require expensive major parts replacements somewhere around 150k to 200k prints.

An A4 product could be a great solution for a customer who on average will never make more than 2,500 colour or 3,500 black pages per month x60.

To sell a more expensive A3 product into that same space consider offering a 72 month lease so as to get to a similar monthly payment on the A4. I would each year escalate the cpc to give you a reason to revisit the customer two years early and upgrade them with a Total Cost of Ownership story.

I do not think too many A4 resellers want to go to 72 months.

It’s about the realities of data. Over 80% of the current A3 placements fit into the volumes you discuss. The facts in the data also show that A3 equipment takes three service interactions to only one service interaction on A4 running comparable volumes. All dealers need to reach out to BEI Services and understand the realities of the total service cost, especially as DaaS becomes the new billing model. In the near future, the customers will have new options more than likely which will come from new players. It seems almost all arguments regarding A4 are to defend the old ways of the sellers and have nothing to do with the realities of end-users. This product-centric thinking is what fuels those looking to disrupt the status quo. The smart play is to replace the revenue of the lower cost A4 with new revenue from IT products and their services. Those dealers stagnated in printers and printer service will one day find themselves starving as alternative technology resellers add printers and A4 MFP’s to their deliverables. The great threat for the Imaging Channel. Is this, IT Resellers can add a low-cost A4 MFP to a huge percentage of the market much easier than legacy copier and printer sales organizations can add IT equipment and their services. Most alternative print equipment and their services resellers are waiting for the following changes to the print deliverable.

Less Print Volume, Less Parts, Greater Supply Yields, Less human service interventions, and reliable A4 MFP  

Those things are here today. More importantly, those things that the alternative competitors have been waiting for are the same things the Imaging Channel hoped would never happen. Meaning the alternative players are ready to move forward while the legacy players are fighting to keeps things in yesterday and battle never won.   

Ray  

 

I am beginning to realize that one of the best tools to use when offering a customer both an A3/ A4 proposal is a longer term lease.

Many A4 devices begin to require expensive major parts replacements somewhere around 150k to 200k prints.

An A4 product could be a great solution for a customer who on average will never make more than 2,500 colour or 3,500 black pages per month x60.

To sell a more expensive A3 product into that same space consider offering a 72 month lease so as to get to a similar monthly payment on the A4. I would each year escalate the cpc to give you a reason to revisit the customer two years early and upgrade them with a Total Cost of Ownership story.

I do not think too many A4 resellers want to go to 72 months.

Ray Stasiezcko posted:
SalesServiceGuy posted:

I am deeply concerned about the race to the bottom with A4 product.

A4 product certainly gets better everyday and some salespeople say it is just as good as A3...maybe true... except for your commissions.

If you like Kraft dinner or Ramen noodles, downgrade your customers from A3 to A4.

Let us not forget one of the largest A4 players out there is Lexmark.  Lexmark is a 100% Chinese owned company called NineStar based in Guangdong, China.

If you cheer MAGA, you cannot cheer Lexmark. God knows what those Chinese chips can do within a corporate LAN (echoes from Chinese telecom giant Huawei scandals)

This week Moody's Investors Services downgraded  Xerox equities to JUNK status.  Let us say that again JUNK, JUNK, JUNK!

https://www.cnbc.com/quotes/?s...chterm=&tab=news

This means, whatever language you want to use, a wide range of institutional investors are now obligated to liquidate their Xerox equity holdings.  This means that Xerox's cost to raise capital and finance debt just increased dramatically.  At the same time Xerox is in a high stakes legal deathmatch battle with Fuji Xerox, who supplies 100% of their LED print engines, over a buyout offer they want to back out of.

I have seen no evidence that HP's purchase of Samsung's print business is going well. I only exist in a super small part of the market so what do I know.  I just do not think HP is close to profitably monetizing their purchase of Samsung's print business. 

If I was a HP shareholder I would be thumbs down on buying Xerox. 

Great if you got the money, sucks if you cannot manage Xerox's incredibly complicated business which demands a lot of incredibly talented people not just in corporate towers but more importantly on the street.

I bought Xerox stock when it was $6.00 range.  Now it is $19.00 and has a long ways to fall.

Appreciate the comments. However, your arguments regarding A4 vs. A3 pertain to what’s good for you. Industries which are going through disruption or when an industry’s particular product or its services become less valuable to those once dependent on them. The disease of Product-Centric thinking will infect those with a stubbornness to modify.   

It is not up to those who sell a product or service to determine its value. Its value is determined by those who buy the product or service. Innovators listen to the old way’s arguments to keep things as they are and create a new approach from what they hear. Innovators will always deliver based on a Customer-Centric model, and those desperate for a prolong yesterday will quickly find themselves focused on their products, their commissions, and their outdated policies and practices. It is past time for the imaging Channel to realize the delivery of print equipment and their services is changing, and the use of the product is declining. Declining use and fewer service interventions create incredible opportunities, for those willing to imagine what could be, based on what should be.  

Dealers who believe that it’s still 1990 will not survive. Those dealers who can monetize and profit from the decline in print will prosper. However, that model will not resemble that of yesterdays. The organizations who understand how to shift towards IT Services or IT Security Services will recreate their value-add along with their business model. Diversification is a must to defend against obsolescence. Sellers who believe the product is more important than the customer will off board more and more customers to the innovators onboarding them.

Many industries and their sales strategies will be tested against continued relevance great salespeople have options. Work for the organizations not trying to save yesterday. Instead, seek those who welcome tomorrow, more importantly, are focused on delivering the future to the present.

Best regards Ray

There is little to no margin in A4.  Folks who want those products are just going to buy on-line.  Let them.  Best bet is focus on areas where you can still make money.  Let other people chase the race to the bottom stuff.

It goes way beyond phones with Huawei.  Huawei is attempting to dominate the global telecom market for next generation, super high speed, 5G networks.

The reason why the Chinese gov't is flipping out over the extradition issues with Meng, CFO Huawei is because she is considered to be a key technology Princess in China with deep family ties to the Chinese gov't.

The Meng extradition issue is exposing China's "Made in China 2025" plan to replace the USA and other countries in select dominant technology issues of today and the near future.

https://www.foxnews.com/tech/h...orld-domination-plot

Watching various YouTube videos about a westerner's daily life in China it is ingrained into their culture that it is OK to steal intellectual property for personal gain without fear of consequences.  Chinese people steal from Chinese people but it is even more preferred to steal from Western sources.

Lexmark is NineStar which is partially owned by the Chinese gov't.  If NineStar officials do not comply with the Chinese gov'ts wishes, they can quickly be made to disappear.

As much as I dislike President Trump, he is correct about levying tariffs against China to try and change their behaviour and stop the gov't directed theft of intellectual property. The Chinese only understand economic pain.  The Chinese gov't is easily capable of waiting out this President for the next one.

As far as what is in a Lexmark chipset, who knows?  Almost all current Lexmark print devices are all capable of automatic firmware updates.  Who knows what code could be buried in there.

SSG

Wow, this has opened my eyes   Thus the reason Huawei phones are not sold in the US.  Personally, I don't trust the Chinese as far as I can spit.  Who knows what chips are being loaded into Lexmark printers.

In 2016, Apex Technologies (now NineStar Corporation) purchased Lexmark at a 17% premium above its share price.

In the background, the Chinese gov't had purchased a 5% stake in Apex (at that time a relatively small and unknown maker of 3rd party toner and inkjet cartridges).   In fact, Lexmark sued Apex for for at least 15 patent violations.

Via what is known as the IC Fund, the Chinese gov't is supporting its technology companies with the goal of of advancing China's, "Made in China 2025", a plan to displace the USA's various long held technological advantages.

How Apex was able to fund the $3.6B all cash purchase of Lexmark is unknown given its market size at the same.  What is known is that the IC Fund cooperated with Apex not only as its financial advisor but also in the expectation that Apex would carry out China's national strategy.

The IC Fund no longer publishes any information with regards to investor relations.

https://www.uschamber.com/site...2025_report_full.pdf

It is a 3 hour flight from Guangdong Province, China where NineStar is located to Beijing.

http://iot.ninestargroup.com/en/about-23.html

NineStar is considered the fourth most influential technology company in China.

http://www.rosco.ru/news_files...ual_Media_Report.pdf

https://www.theepochtimes.com/...economy_2502976.html

An examination of Lexmark's current market strategy prices it MFPs and printers with steep discounts and quarterly rebates plus unusually high sales spiffs.  All of its accessories, parts and consumables are priced high with no discount.  The strategy is working because NineStar's profits are way up.

Taking all of this into consideration, I would far prefer if Xerox gave HP the opportunity to become a major shareholder, HP should take the deal. If NineStar was to get the chance to buy Xerox, with Xerox's deep entrenchment in all levels of the US gov't and major corporations, unlimited "dark pools" of money from the Chinese gov't would become available.

SalesServiceGuy posted:

I am deeply concerned about the race to the bottom with A4 product.

A4 product certainly gets better everyday and some salespeople say it is just as good as A3...maybe true... except for your commissions.

If you like Kraft dinner or Ramen noodles, downgrade your customers from A3 to A4.

Let us not forget one of the largest A4 players out there is Lexmark.  Lexmark is a 100% Chinese owned company called NineStar based in Guangdong, China.

If you cheer MAGA, you cannot cheer Lexmark. God knows what those Chinese chips can do within a corporate LAN (echoes from Chinese telecom giant Huawei scandals)

This week Moody's Investors Services downgraded  Xerox equities to JUNK status.  Let us say that again JUNK, JUNK, JUNK!

https://www.cnbc.com/quotes/?s...chterm=&tab=news

This means, whatever language you want to use, a wide range of institutional investors are now obligated to liquidate their Xerox equity holdings.  This means that Xerox's cost to raise capital and finance debt just increased dramatically.  At the same time Xerox is in a high stakes legal deathmatch battle with Fuji Xerox, who supplies 100% of their LED print engines, over a buyout offer they want to back out of.

I have seen no evidence that HP's purchase of Samsung's print business is going well. I only exist in a super small part of the market so what do I know.  I just do not think HP is close to profitably monetizing their purchase of Samsung's print business. 

If I was a HP shareholder I would be thumbs down on buying Xerox. 

Great if you got the money, sucks if you cannot manage Xerox's incredibly complicated business which demands a lot of incredibly talented people not just in corporate towers but more importantly on the street.

I bought Xerox stock when it was $6.00 range.  Now it is $19.00 and has a long ways to fall.

Appreciate the comments. However, your arguments regarding A4 vs. A3 pertain to what’s good for you. Industries which are going through disruption or when an industry’s particular product or its services become less valuable to those once dependent on them. The disease of Product-Centric thinking will infect those with a stubbornness to modify.   

It is not up to those who sell a product or service to determine its value. Its value is determined by those who buy the product or service. Innovators listen to the old way’s arguments to keep things as they are and create a new approach from what they hear. Innovators will always deliver based on a Customer-Centric model, and those desperate for a prolong yesterday will quickly find themselves focused on their products, their commissions, and their outdated policies and practices. It is past time for the imaging Channel to realize the delivery of print equipment and their services is changing, and the use of the product is declining. Declining use and fewer service interventions create incredible opportunities, for those willing to imagine what could be, based on what should be.  

Dealers who believe that it’s still 1990 will not survive. Those dealers who can monetize and profit from the decline in print will prosper. However, that model will not resemble that of yesterdays. The organizations who understand how to shift towards IT Services or IT Security Services will recreate their value-add along with their business model. Diversification is a must to defend against obsolescence. Sellers who believe the product is more important than the customer will off board more and more customers to the innovators onboarding them.

Many industries and their sales strategies will be tested against continued relevance great salespeople have options. Work for the organizations not trying to save yesterday. Instead, seek those who welcome tomorrow, more importantly, are focused on delivering the future to the present.

Best regards Ray

I am deeply concerned about the race to the bottom with A4 product.

A4 product certainly gets better everyday and some salespeople say it is just as good as A3...maybe true... except for your commissions.

If you like Kraft dinner or Ramen noodles, downgrade your customers from A3 to A4.

Let us not forget one of the largest A4 players out there is Lexmark.  Lexmark is a 100% Chinese owned company called NineStar based in Guangdong, China.

If you cheer MAGA, you cannot cheer Lexmark. God knows what those Chinese chips can do within a corporate LAN (echoes from Chinese telecom giant Huawei scandals)

This week Moody's Investors Services downgraded  Xerox equities to JUNK status.  Let us say that again JUNK, JUNK, JUNK!

https://www.cnbc.com/quotes/?s...chterm=&tab=news

This means, whatever language you want to use, a wide range of institutional investors are now obligated to liquidate their Xerox equity holdings.  This means that Xerox's cost to raise capital and finance debt just increased dramatically.  At the same time Xerox is in a high stakes legal deathmatch battle with Fuji Xerox, who supplies 100% of their LED print engines, over a buyout offer they want to back out of.

I have seen no evidence that HP's purchase of Samsung's print business is going well. I only exist in a super small part of the market so what do I know.  I just do not think HP is close to profitably monetizing their purchase of Samsung's print business. 

If I was a HP shareholder I would be thumbs down on buying Xerox. 

Great if you got the money, sucks if you cannot manage Xerox's incredibly complicated business which demands a lot of incredibly talented people not just in corporate towers but more importantly on the street.

I bought Xerox stock when it was $6.00 range.  Now it is $19.00 and has a long ways to fall.

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