Xerox Unveils Computer Gear for Office-Automation Market

Dow Jones News Service

April 30, 1985

NY -- XEROX CORP. INTRODUCED FIVE DESKTOP COMPUTERS, TWO LASER PRINTERS AND RELATED SOFTWARE PROGRAMS IN ITS BIGGEST MOVE YET TO TURN AROUND ITS FALTERING PERFORMANCE IN THE MARKET FOR COMPUTERS AND OFFICE-AUTOMATION EQUIPMENT.

XEROX'S PRODUCT INTRODUCTIONS MARK A NEWLY REFINED STRATEGY THAT MOVES ITS FOCUS AWAY FROM THE BROAD PERSONAL-COMPUTER MARKET AND TOWARD INTEGRATED SYSTEMS OF MACHINES USED FOR SO-CALLED DOCUMENT CREATION AND DISTRIBUTION. IT INCLUDES MORE EMPHASIS ON AGGRESSIVE PRICING, A NEW WILLINGNESS TO BRIDGE ITS ETHERNET OFFICE-COMPUTER NETWORK TO THE SYSTEMS OF COMPETING VENDORS AND -- FOR THE FIRST TIME -- NEW MACHINES THAT CAN USE SOFTWARE WRITTEN FOR THE INDUSTRY-STANDARD INTERNATIONAL BUSINESS MACHINES CORP. PERSONAL COMPUTER.

BUT INSTEAD OF TAKING ON IBM HEAD-TO-HEAD IN RETAIL STORES, XEROX WILL SELL MOST OF ITS NEW PRODUCTS THROUGH ITS NEWLY MERGED, 4,200-PERSON SALES FORCE. XEROX HAS SPENT MORE THAN $20 MILLION TRAINING ITS 3,500 PHOTOCOPIER SALES PEOPLE TO HANDLE COMPUTER SYSTEMS -- A DRAMATIC DEPARTURE FROM THE PAST, WHEN SEPARATE AND SOMETIMES RIVAL XEROX SALES FORCES HANDLED DIFFERENT KINDS OF PRODUCTS.

"WE HAVE BEEN FRAGMENTED, BUT NOT ANY LONGER," SAID DWIGHT F. RYAN, PRESIDENT OF THE COMPANY'S BUSINESS SYSTEMS GROUP THAT OVERSEES THE SALES FORCE. HE CALLED THE JOINT SALES APPROACH "THE MOST IMPORTANT CHARACTERISTIC" OF XEROX'S NEW EFFORTS.

MUCH OF XEROX'S OWN FUTURE IS AT STAKE. THE COMPANY, WHICH DERIVED ABOUT 70% OF 1984 REVENUE OF $8.79 BILLION FROM PHOTOCOPIERS, HAS SAID COMPUTERS AND RELATED PRODUCTS WILL PROVIDE HALF OF ITS REVENUE BY 1990 AND MOST OF ITS BUSINESS FIVE YEARS AFTER THAT. BUT ITS EFFORTS SO FAR HAVE MET REPEATED MARKETING SETBACKS, DESPITE THE COMPANY'S MUCH-PRAISED TECHNOLOGY.

XEROX'S STRATEGY, IF IT SUCCEEDS, COULD PRESSURE WANG LABORATORIES INC. AND, IN PARTICULAR, APPLE COMPUTER INC. XEROX NOW IS ESPOUSING MUCH OF THE SAME "WORK GROUP" PHILOSOPHY THAT APPLE USES IN MARKETING ITS NEW APPLETALK NETWORK. BOTH AIM AT BIG OFFICES NEEDING VISUALLY ORIENTED, CORPORATE PUBLISHING EQUIPMENT TO PRODUCE REPORTS AND THE LIKE. XEROX, WITH THESE NEW PRODUCTS, ALSO HAS DROPPED ITS RESISTANCE TO IBM-COMPATIBILITY. BUT APPLE DOESN'T SELL IBM-COMPATIBLE COMPUTERS, ALTHOUGH IT HAS SAID IT WILL SHIP IN THE FALL A PRODUCT ALLOWING IBM PCS TO BECOME A PART OF ITS NETWORK.

VARIOUS CONSULTANTS PRAISED THE NEW XEROX PRODUCTS, BUT WARNED THAT SUCCESS DEPENDS ON THE NEWLY COMBINED SALES FORCE. "THEY'VE GOT A FIGHTING CHANCE," SAID ROBERT T. FERTIG OF ENTERPRISE INFORMATION SYSTEMS INC., A CONSULTING FIRM. "THIS IS XEROX'S LAST SHOT TO REALLY GET BACK INTO THE OFFICE SYSTEMS MARKET. IF THEY DON'T PULL IT OFF THIS TIME, IT'S OVER."

CONSULTANT AMY WOHL PREDICTED STRONG SALES FOR TWO NEW XEROX WORD-PROCESSING PCS INTRODUCED TUESDAY AND NOTED WHAT APPEARS TO BE A NEW COMMITMENT TO THE COMPUTER MARKET BY XEROX'S TOP EXECUTIVES.

XEROX ALSO SAID TUESDAY IT AGREED WITH AMERICAN TELEPHONE & TELEGRAPH CO. TO MAKE ITS NETWORK SYSTEM COMPATIBLE WITH AT&T'S RECENTLY INTRODUCED STARLAN NETWORK, AND THAT IT WILL SELL PARTS FOR THE AT&T SYSTEM. STARLAN, ALTHOUGH IT TRANSMITS DATA AT ONLY ONE-TENTH THE SPEED OF XEROX'S ETHERNET SYSTEM, OFFERS THE ADVANTAGE OF USING EXISTING PHONE LINES INSTEAD OF REQUIRING NEW CABLE.

ANALYSTS WERE IMPRESSED MOST BY THE FEATURES AND PRICING OF THE COMPANY'S NEW 6085 MODEL, A $4,995 VERSION OF XEROX'S ORIGINAL STAR COMPUTER, A MUCH-PRAISED SYSTEM FIRST PRICED AT MORE THAN $10,000. THE NEW COMPUTER OFFERS THE STAR'S POWERFUL BUT EASY-TO-USE FEATURES, BUT GOES FURTHER BY ALSO RUNNING IBM PC SOFTWARE AND OFFERING BASIC MEMORY FOR ONE MILLION CHARACTERS OF DATA. THE 6085 WON'T BE AVAILABLE UNTIL SEPTEMBER, WHILE MOST OTHER PRODUCTS WILL BE OUT IN 90 DAYS.

XEROX'S NEW PRODUCTS ALSO INCLUDE THE 6000 SERIES OF IBM-COMPATIBLE COMPUTERS MADE BY ING C. OLIVETTI & CO. TWO ARE STRAIGHT "CLONES" OF THE IBM PC, SELLING FOR $2,885 OR $4,485, DEPENDING ON ACCESSORIES, AND PRICED COMPARABLY WITH THE IBM LINE. THE SAME MODELS ALSO WILL BE SOLD AS WORD-PROCESSING COMPUTERS FOR $2,985 AND $5,150 AND INCLUDE SPECIALIZED SECRETARIAL KEYBOARDS AND XEROX-DESIGNED WORD-PROCESSING SOFTWARE.

XEROX, ATTEMPTING TO BLUNT INROADS BY JAPANESE MAKERS, ALSO INTRODUCED ITS FIRST LOW-PRICED LASER PRINTER. XEROX, WHICH PREVIOUSLY HADN'T SOLD ANY LASER PRINTERS FOR LESS THAN $16,000, INTRODUCED THE 4045 LASER CP FOR $4,995, WHICH UNDERCUTS THE ABOUT $7,000 PRICE OF APPLE'S NEW LASERWRITER BUT OFFERS FEWER FANCY-TYPEFACE FEATURES. XEROX INTRODUCED A SECOND PRINTER, THE 3700, AIMED AT DATA-PROCESSING CENTERS AND PRICED AT $29,995.