IBM BACK IN PC PRINTERS, EYES HOME MARKET NEXT:ADS HERALD RETURN INTO OFFICE BIZ AFTER FIVE YEARS OUT OF THE MARKET

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Five years after exiting the PC printer market, IBM Corp. this week jumps back in-taking on the company it spun off, Lexmark International, and market leader Hewlett-Packard Co.

IBM is introducing four models under the IBM Network Printers name, aiming the products at the estimated $8 billion global market for networked office printers. IBM is hinting it will add low-cost printers for home.

The business line will be backed with a multimillion-dollar ad campaign starting with three pages in The Wall Street Journal June 19, followed by computer publications in the U.S. and major global markets.

IBM also is doing direct mail. Ogilvy & Mather, Houston and New York, developed the advertising and direct mail effort.

OUTSIDE THE BOX

Ads will prod printer buyers to "Think outside the box," stressing the importance of networking, software and other matters that go beyond the printer itself. That plays to IBM's corporate strategy to position itself as a one-stop source for networking hardware, software and services.

Hewlett-Packard commands an estimated 60% share of the networked printer market; Lexmark and Apple Computer come in next with about 20% between them.

"Over time, we would like to be a significant No. 2 player in the marketplace," said Paul Preo, marketing manager for work group printers. "I think that's within our capabilities."

Lexmark was created in 1991, when IBM spun off its typewriter and low-end printer division.

IBM, however, kept its high-end printer business. That venture, Pennant Systems, was reborn in 1995 as IBM Printing Systems Co., a $2 billion marketer of big commercial printers.

A five-year no-compete agreement with Lexmark ended in March, so IBM Printing Systems is moving into mainstream office laser printers with a line expected to retail for $1,600 to $8,000.

MORE COULD BE ON WAY

Mr. Preo said, "It's probably not hard" to predict IBM will move back into the home and small-office printer field, where Hewlett-Packard, Canon Computer Systems and Epson America are waging an intense marketing battle.

"It's not in our short-term plans," Mr. Preo said. But "we expect to be getting requests for that in the future."

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