Xerox 2007 Annual Report Download - page 6

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4
Accelerating the adoption of color
We’ve led the transition to color from top to bottom across the markets we serve – color
that’s both the highest quality and highly affordable. Last year, more than 40 billion
pages were printed on Xerox color systems. That’s an increase of 31 percent over 2006
and way ahead of our competitors. In fact, according to estimates by InfoTrends, a
leading independent research firm, Xerox accounts for half of the total worldwide color
pages printed by high-speed digital systems.
And, for us, the power really is in the pages. We operate an annuity-based business
with more than 70 percent of our total revenue coming from recurring revenue streams,
what we call our “post sale.” This includes interest income from financing our customers’
purchases; service, such as technical support as well as consulting and outsourcing
services; and supplies, like ink, paper and toner. The latter is why pages are so important
to our business. Post-sale revenue from color pages was up 18 percent year-over-year,
so we know the model is working. As that continues to grow, so will Xerox.
Color now accounts for about 39 percent of our total revenue, but only 12 percent of our
total pages (excluding the benefit of Global Imaging Systems) – indicating a tremendous
growth opportunity that we’re well positioned to mine. Last year, we shook up the
marketplace by launching an office printer that makes the cost of printing a color page
as affordable as black and white. It’s the Phaser® 8860 and it uses our proprietary solid
ink, cartridge-free technology, minimizing the impact on the environment. We announced
18 color products in 2007, strengthening what is already the industry’s broadest portfolio
of digital color printing systems. Look for more worldclass color technology this year –
technology that promises to widen our significant competitive advantage and generates
the pages that boost our annuity.
We’ve made some critical strategic
bets in the past few years that are now
differentiating Xerox in the marketplace
and fueling our growth.