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Lexmark looks to MPS

April 13, 2012

OEM signifies a focus on MPS in a bid to strengthen market position.

Market analyst Trefis has reported on the developments of printer manufacturer Lexmark, stating that the company is looking to Managed Print Services (MPS) in a bid to “arrest declining margins” although notes the transiency of the solution.

Trefis notes: “Managed Printing Services is garnering a lot of attention from industries to manage printing costs. MPS tends to make printing cheaper and more efficient as it is offered as a service. Under the MPS procurement, maintenance and other aspects are taken over by Lexmark.

“The company has earned [a] contract from Anehuser-Busch to provide MPS for the brewer. The printing solutions market has been seeing declining margins and having MPS as a service as opposed to just selling the product can help Lexmark rein in lower margins”.

Lexmark has recently acquired a five-year, $50 million (€37 million) MPS contract from the United States Department of Agriculture (USDA) and Trefis comments that “[Lexmark] may raise its outlook as MPS gains favour with the industry incumbents to streamline printing solutions”.

However Trefis is notably cautious about the direction, adding “This is, however, a stop-gap solution and is only a matter of time before services start facing margin pressure. To be sustainable, Lexmark will have to find a niche where it can retain pricing power”.

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