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Update: Lexmark to Produce Dell Printers, Cartridges; Dell to Use 'Lexmark's Existing Technology'

October 4, 2002

Dell and Lexmark have inked a deal to manufacture printers and cartridges under the Dell name in the first half of 2003. The companies will work jointly on product development, manufacturing and sales of new printers and peripherals.

Dell will offer both inkjet and laser printers, but the company was unable to confirm whether or not cartridges for its new printers would contain Prebate-style chips.

"It is still in the development phase," said Mary Fad, a Dell spokesperson. "But we expect that we will be leveraging Lexmark's existing technology."

Fad said that to sell the new printers and cartridges Dell will likely continue its direct sale approach, using the Dell Web site, toll-free phone number and sales representatives, rather than making products available in the retail environment.

Until the printers are available in 2003, Dell has selected Lexmark as its preferred provider for imaging products. Dell customers will have the option of getting Lexmark printers bundled with computers during Dell's fourth quarter of November, December and January. That coincides with the holiday season, when analysts say that sales of computers bundled with printers are particularly attractive to consumers.

"The Lexmark printers will definitely be less than what we're offering them for right now," Fad said. "They will probably also be cheaper than what we charge for other manufacturers' printers. Lexmark is our preferred provider. If the customer is unsure, we'll push the Lexmark product."

The agreement comes after HP refused to renew its resale partnership with Dell earlier this year, indicating that HP believed Dell might soon enter into the printer arena. Previously, Dell had agreements with HP and other printer manufacturers, including Lexmark, Epson, Xerox, Brother and Canon, to act as a reseller for those OEMs' printers. But under that deal, Dell received no profit from what analysts call "a predictable annuities stream" from sales of toner and inkjet cartridges.

With the new deal, Dell will continue reselling OEM printers, but will offer special deals on Lexmark items. Even after the Dell-branded products hit the market, the company will continue to sell non-Dell printers. In addition, Dell recently increased its revenue forecasts, saying that revenue for its fiscal third quarter, which ends Nov. 1, will reach a company-record $9.1 billion, up 22 percent from one year ago.

For more information, contact Dell at www.dell.com and Lexmark at www.lexmark.com.