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Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
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To: John Koligman who wrote (14601)10/8/2002 2:33:50 AM
From: Gus  Read Replies (1) of 17183
 
Lexmark would be stupid to cut their own throat by giving the crown jewels to Dell, so a buyout would probably have to be done, but I wonder if there is some way Dell is figuring on getting around this?? I can't see it without a purchase though, simply because the printer guys aren't going to 'give up the cartridge'...

Here's a quick and dirty rundown of the patent scene in the printing industry:

1) The old HP paid Pitney Bowes something like $400M in 2000 or 2001 to settle a patent infringement lawsuit over laser printers. HP has 77% of the monochrome laser printer market so everybody else that Pitney Bowes is suing will probably pay too. Canon is a question mark because it supplies HP with the laser engines for its laser printers, which were presumably part of the settlement.

2) Xerox and the old HP sued each other 6x in the late 90s over inkjet printing patents before settling in 2000 or 2001. I think HP got the upper hand in that confidential settlement because Xerox has major problems entering the low-end and mid-range inkjet market while HP appears not to have any problems entering the high-end market where Xerox plays.

Lexmark actually appears to be the only other player with a defensible patent portfolio that allows it to venture from the low-end inkjet market to the high-end laser market. That gives it leverage in any reseller deal including the one with Dell. That's why you and I agree that Dell will eventually have to take out Lexmark to capture the margins of those "blades."
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