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Kodak to Sell and Service IBM Copiers

April 19, 1988

ROCHESTER, N.Y. (AP) _ Eastman Kodak Co. will sell and service copiers made by International Business Machine Corp. under terms of an agreement announced Tuesday that marks a major step out of the copier business for IBM.

Not only will Kodak take over existing rental agreements, but by this time next year, the IBM nameplate on the company’s three machines will be replaced with a Kodak logo, said IBM spokesman Andy Russell.

Kodak will also continue to sell its Ektaprint line of copiers, some of which directly compete with IBM machines. Kodak already sells a Canon-made copier under its Ektaprint brand.

″Copiers are not as crucial as they were in the past. They’re not attachable to our systems, but today our emphasis is on intergrating systems ... personal computers and printers,″ Russell said.

The agreement doesn’t mean IBM is getting out of the copier business, however, Russell said from the company’s headquarters in Armonk, N.Y.

The company will continue to take advantage of its copier development and manufacturing abilities, he said, although giving up the copier sales and service aspects will allow IBM to concentrate on computers and printers.

Kodak and IBM, along with Xerox Corp., are the dominant copier companies in the expensive, high-volume, copying segment, according to industry statistics compiled by Dataquest Inc., a San Jose, Calif.-based market research firm.

Of the 29,400 machines owned or being rented last year in the segment, which includes machines that make 70 or more copies a minute, Xerox had 14,400, IBM had 6,000 and Kodak had 4,700.

Kodak and IBM also sell copiers that operate in the mid-volume range of 45 to 69 copies a minute, said Mary Lou Demers, a copier industry analyst at Dataquest.

The agreement annnounced Tuesday, which must be approved by federal regulatory agencies, pertains to machines in the United States only. Negotiations for a similar agreement in other countries are under way.

For Kodak, the deal is a great chance to grab IBM’s loyal customer base, something the photo giant and others have been unsuccessfully trying to do for years, said Demers.

″It will be interesting to see what happens as the sales agreements run out and it’s time to renew,″ Demers said. ″We’ll see if Kodak can retain that same loyalty.″

She said she was not surprised at Tuesday’s announcement.

″People in the industry have been wondering for several years whether IBM was either going to introduce some brand new machine or get out of the business,″ Demers said.

The deal with Kodak moves IBM out of the day-to-day copier business, Demers said, but keeps the company in touch with the industry through manufacturing and research.

″We expect them to do a lot in terms of laser printing, but whether that research carries over to copiers remains to be seen,′ she said.

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