IBM Corp is set to bow out of printers for the second time. It wouldn’t comment on a Wall Street Journal report that it’s hired Goldman Sachs & Co to find a buyer for its $2bn-odd Printing Systems Co, but the company’s known to have been actively pursuing several different end-games for the business which employs 5,000. Possible buyers might include Hewlett-Packard Co, Xerox Corp or even Lexmark International Inc – the company formed around the low-end desktop printer business which IBM sold off in 1991 so that it could focus on mid-range and high-end printers. Although IBM subsequently re-entered the desktop printer business in 1996 it has made little headway in this market and even sales of higher-end systems which print from 32 to hundreds or thousands of pages a minute have declined. Salomon Smith Barney estimated IBM’s printer sales were $759m compared with $935m in 1994 although it’s reckoned to make a modest profit on the business which includes some $1.2bn in maintenance contracts. Analysts suggest the sale is part of IBM’s plan to focus on high- growth and core computer markets and follows a review by executives – including new CFO Douglas Maine – of products that could be bought more cheaply from third parties. However plans to sell, or perhaps spin-off Printing Systems Co are thought to pre- date Maine’s arrival, suggesting it was he who applied the red pen. Other decisions, including the decision to sell-off its interest in the Somerset PowerPC design shop look to stem from the review. Texas Instruments Inc and DEC also recently shed their printer businesses.
