Cassandras predicting the demise of the printer market at the hands of the internet, email and automated document management have long since been silenced by that market's extraordinary resilience. The latest figures for the European market alone from market researcher Context show a robust surge of 17.2 per cent in printer units sold in the region last year [1999] over 1998.

Inkjet sales in particular are flying high, as small businesses and consumers respond to plunging price points and ever better quality of colour output.

There was a time when 'near-laser quality' actually meant smudgy and nasty. The fact that it was colour at all was deemed to suffice.

Now colour inkjets are really putting the frighteners on the laser sector, which explains why vendors with a corporate laser pedigree are starting to remodel themselves as purveyors of low-cost inkjets for the small business. Lexmark is perhaps the prime example to date.

The latest manufacturer to effect this change is veteran warhorse Xerox. Perhaps the most striking thing about Xerox's entry into inkjet is the scale of the task it faces. With Hewlett Packard (HP) and its three nearest rivals (in order - Epson, Canon and Lexmark) accounting for a massive 80 per cent of inkjet market share in Europe, a figure reflected globally and very much on the way up, Xerox must know that its professed ambitions will look impressively aggressive to some but foolhardy and vainglorious to others.

Setting its sights on SoHo
As evidence for the seriousness of its bid for double-digit market share, which would take the vendor from tier-two status into a competitive third or fourth place, Xerox cites its $2bn (£1.25bn) alliance with Sharp and Fuji Xerox. The three are now working on more affordable inkjet technology aimed specifically at the SoHo market.

Promising the first fruits of this alliance by mid-summer at the latest, Jim Firestone, president of Xerox's channels group, told Computer Reseller News at the alliance's announcement in New York: "The SoHo market is what everyone wants a piece of, but no-one is as focused on it as us. We are not known in the sector yet, but everyone knows our brand name."

He also pointed to the company's massive new components plant in Dundalk, Ireland, set to start manufacturing in May, as a further indication of its seriousness. He said that, combined with Sharp's global production capacity, Xerox was ready to take its place in the inkjet elite.

But Xerox's challenge lies not so much in its ability to produce the actual goods, or in capitalising on its brand name, but in competing with incumbents in an already well-served market. Firestone had a point when he said: "HP inkjets are hugely over-distributed, and no-one makes money selling them."

But is it really in Xerox's power to make a better fist of rendering inkjets more profitable for its channel than HP?

Firestone promises a highly selective and limited distribution policy, and says he can guarantee a higher percentage of revenue for retailers and resellers than HP. How the figures will actually add up to achieve this, and leave Xerox, Sharp and Fuji Xerox in profit, neither he nor Richard Thoman, chief executive of Xerox, would elaborate on.

Then there's Xerox's less than scintillating channel history. Firestone admitted: "Our dealer support was bad, but that is now dramatically improved.

"We used to encounter scepticism and mistrust, but that all started to change in 1998, and we are now hearing a different story."

It may dent this newfound enthusiasm somewhat to find that Xerox expects to achieve a significant and growing proportion of inkjet sales direct over the internet, satisfying the demands of Wall Street for ecommerce sales revenue.

The big issue
The fact remains that inkjet's undoubted popularity with consumers and small businesses is not something that anyone other than the largest retailers and distributors can share in.

The cost of consumables, traditionally a consumer bugbear but a channel banker, is an issue that Xerox appears committed to tackling, with individual colour cartridges replaceable when they run out. That is like Clarks telling shoe shops that they've invented self-cleaning footwear that never wears out.

If Xerox manages to turn a profit from its new-found interest in the sector, it will be a splendid achievement. If it can carry its channel with it, it will be a miracle.