Xerox
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| Xerox Corporation | |
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| Type | Public (NYSE: XRX) |
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| Founded | Rochester, New York, USA (1906) |
| Headquarters | Stamford, Connecticut, USA Offices in Rochester, New York |
| Key people | Anne M. Mulcahy, Chairman & CEO Larry Zimmerman, SVP & CFO |
| Industry | Document Services Computer Peripherals |
| Products | Digital Imaging Printers |
| Revenue |  $15.7 billion USD (2005) |
| Employees | ~55,000 (2005) |
| Slogan | The Document Company |
| Website | www.xerox.com www.office.xerox.com |
Xerox Corporation (NYSE: XRX) is an American document management company, which manufactures and sells a range of color and black-and-white printers, multifunction systems, photo copiers, digital production printing presses, and related consulting services and supplies. Xerox is headquartered in Stamford, Connecticut, though its largest population of employees is based in and around Rochester, New York, the area in which the company was founded. The UK & European headquarters are situated in Uxbridge, Middlesex and the European Technical headquarters are in Welwyn Garden City, Hertfordshire.
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[edit] History
Xerox was founded in 1906 as "The Haloid Company" manufacturing photographic paper and equipment. The company came to prominence in 1959 with the introduction of the first plain paper photocopier using the process of xerography (electrophotography) developed by Chester Carlson, the Xerox 914. The company subsequently changed its name to "Haloid Xerox" in 1958. The 914 was so popular that by the end of 1961, Xerox had almost $60 million in revenue. By 1965, revenues leaped to over $500 million. Before releasing the 914, Xerox had also introduced the first xerographic printer, the "Copyflo" in 1955.
The company expanded substantially throughout the 1960s, making millionaires of some long-suffering investors who had nursed the company through the slow research and development phase of the product. In 1960, the "Wilson Center for Research and Technology" was opened in Webster, New York, a research facility for xerography. In 1961, the company changed its name to "Xerox Corporation". Xerox common stock (XRX) was listed on the New York Stock Exchange in 1961 and on the Chicago Stock Exchange in 1990.
In 1963, Xerox introduced the Xerox 813, the first desktop plain-paper copier, bringing Carlson's vision of a copier that could fit on anyone's office desk into a reality. Ten years later in 1973, a color copier followed.
In 1970, under company president Charles Peter McColough, Xerox opened the Xerox PARC (Xerox Palo Alto Research Center) research facility. The facility developed upon many modern computing methods such as the mouse and graphical user interface to create the paperless office. From these inventions, Xerox PARC created the Xerox Alto in 1973, a small minicomputer similar to a workstation and personal computer. The Alto was never commercially sold, as Xerox itself could not see the sales potential of it. In 1979, several Apple Computer employees visited Xerox PARC, interested in seeing their developments, including Steve Jobs. Jobs, and the other Apple employees, saw the commercial potential of the GUI and mouse, and began development of the Apple Lisa, which was eventually introduced in 1983 for US$10,000. It was a commercial failure.
The first laser printer was produced by Xerox in 1977 when researcher Gary Starkweather modified a Xerox copier in 1971. Laser printing eventually became a multi billion dollar business for Xerox. It was known as the Xerox 9700.
Xerox later released a similar system to the Alto, the Xerox Star in 1981 as a workstation. It was the first commercial system to incorporate various technologies that today have become commonplace in personal computers, including a bit-mapped display, a window-based GUI, mouse, Ethernet networking, file servers, print servers and e-mail. The Xerox Star, despite its technological breakthroughs, did not sell well due to its high price, costing $16,000 per unit. A typical Xerox Star-based office would have cost $100,000.
In the mid 80s, Apple considered buying Xerox out, however a deal was never reached. Apple attempted to adapt the graphical user interface and mouse to a more affordable personal computer, aimed towards the business and education markets. The Apple Macintosh was released in 1984, and was the first personal computer to popularize the GUI and mouse amongst the public, released with the 1984 Super Bowl commercial. In the late 1980s, Xerox sued Apple over their use of the graphical user interface. The Xerox case was dismissed because the three year statute of limitations had passed -- Xerox had waited too long to file a suit.
The company was revived in the 1980s and 1990s, through improvement in quality design and realignment of its product line. Development of digital photocopiers in the 1990s and a revamp of the entire product range—essentially high-end laser printers with attached scanners which were able to be attached to computer networks—again gave Xerox a technical lead over its competitors. Xerox worked to turn its product into a service, providing a complete "document service" to companies including supply, maintenance, configuration, and user support. To reinforce this image, the company introduced a corporate signature, "The Document Company®" above its main logo and introduced a red "digital X®". The "digital X" symbolized the transition of documents between the paper and digital worlds.
In 2000, Xerox acquired Tektronix color printing and imaging division in Wilsonville, Oregon, for US$925 million. This led to the current Xerox Phaser line of products as well as Xerox solid ink printing technology.
In September 2004, Xerox celebrated the 45th anniversary of the Xerox 914. More than 200,000 units were made around the world between 1959 and 1976, the year production of the 914 was stopped. Today, the 914 is part of American history as an artifact in the Smithsonian Institution.
Xerox's turnaround was largely lead by Anne M. Mulcahy, who was appointed president in May 2000, CEO in August 2001 and chairman in January 2002. [1] Mulcahy launched an aggressive turnaround plan that returned Xerox to full-year profitability by the end of 2002, along with decreasing debt, increasing cash, and continuing to invest in research and development.
[edit] Current products
Xerox today manufactures and sells office equipment including photo copiers, Xerox Phaser printers, and multifunction printers as well as production equipment including workflow software under the brand strategy of FreeFlow. The impact of Xerox FreeFlow products on the graphic arts market and the print industry in general has grown exponentially since May 2006, largely as a result of the Xerox presence at IPEX 2006. Xerox also sells scanners and digital presses.
Xerox sells both color and black and white printers under the Xerox Phaser brand, with the color consumer model starting at US$299; the most expensive color model costs US$6,799.
Xerox also produces fax machines, professional printers, black and white copiers, and several other products.
In addition, Xerox produces many printing and office supplies such as paper, in many forms; and markets software such as DocuShare and FlowPort, offers consulting services, ECM Digital Repository Services and printing outsourcing.
[edit] Corporate structure
Although Xerox is a global brand, it maintains a joint venture, Fuji Xerox, with Japanese photographic firm Fuji Photo Film Co. to develop, produce and sell in the Asia-Pacific region. Fuji Photo Film Co. is currently the majority stakeholder, with 75% of the shareholding.
European operations, Rank Xerox has been fully owned by Xerox Corporation since 1997. The Rank Xerox name was discontinued following the buyout. Xerox India, formerly Modi Xerox, is Xerox's Indian subsidiary derived from a joint venture formed between Dr Bhupendra Kumar Modi and Rank Xerox in 1983. Xerox obtained a majority stake in 1999 and aims to buyout the remaining shareholders. [2]
Xerox now sponsors the Ducati Factory Team in the World Superbike Championship, under the name of the"Xerox Factory Ducati Team". In 2006 Xerox Ducati won the World Superbike Title with the help of Troy Bayliss. Bayliss was the run away winner, winning the title 3 rounds from the end of the Championship.
[edit] Alleged accounting irregularities
On April 11, 2002, the Securities and Exchange Commission filed a complaint against Xerox. [3] The complaint alleged Xerox deceived the public between 1997 and 2000 by employing several "accounting maneuvers," the most significant of which was a change in when Xerox recorded revenue from copy machine leases — recognizing a "sale" in the period a lease contract was signed, instead of recognizing revenue ratably over the entire length of the contract. At issue was when the revenue was recognized, not the validity of the revenue. Xerox's restatement only changed what year the revenue was stated.
Prior to 1997, Xerox had recognized revenue from equipment (copy machine) rentals, or leases, as required by U.S. generally accepted accounting principles (U.S. GAAP). U.S. GAAP (specifically FAS 13) prohibits companies from recognizing the entire proceeds of the sale of equipment unless certain criteria are met, such as transfer of ownership. If none of the criteria are met, the "sale" is considered a lease, and only the rental payments owed to the company in the current period can be treated as revenue in the current period.
The SEC charged that the change in how Xerox applied accounting principles not only violated GAAP, but was intentionally designed to fool Wall Street into believing the new management team was working wonders, exceeding Wall Street's expectations nearly every quarter from 1997 through 1999. The SEC further charged that the accounting irregularities increased fiscal year 1997 pretax earnings by $405 million, 1998 pretax earnings by $655 million, and 1999 pretax earnings by $511 million (in each quarter of each year, earnings were inflated just enough to exceed the Wall Street's First Call Consensus EPS).
The SEC also alleged that Xerox's senior management was aware of, either by directing or approving, the accounting actions that were taken for the purpose of what management called "closing the gap" to meet revenue and profit goals. When Xerox's auditors, KPMG, questioned the legitimacy of the company's accounting practices, senior management requested that a new partner be assigned to its account. The SEC further charged that in order to keep the relationship with Xerox that had lasted nearly 40 years, and to protect the $82 million in audit and non-audit fees KPMG would collect from Xerox between 1997 and 2000, KPMG complied with management's request.
The SEC allegations said that the "accounting tricks" employed by Xerox were a double-edged sword: by accelerating future revenues into present periods, it became increasingly difficult for management to meet investors' expectations in future periods, especially as the economy began to worsen in 1999 and later years.
In response to the SEC's complaint, Xerox Corporation neither admitted nor denied wrongdoing. It agreed to pay a $10 million penalty and to restate its financial results for the years 1997 through 2000. On June 5, 2003, six Xerox senior executives accused of securities fraud, including former chief executive officers Paul A. Allaire and G. Richard Thoman, and its former chief financial officer, Barry D. Romeril, settled their issues with the SEC and neither admitted nor denied wrongdoing. They agreed to pay $22 million in penalties, disgorgement, and interest.
On January 29, 2003, the SEC filed a complaint against Xerox's auditors [4], KPMG, alleging four partners in the "Big Five" accounting firm, Michael A. Conway, 59, Joseph T. Boyle, 59, Anthony P. Dolanski, 56, and Ronald A. Safran, 49, permitted Xerox to "cook the books" to fill a $3 billion "gap" in revenue and $1.4 billion "gap" in pre-tax earnings. As noted in the complaint: "There was no watchdog at Xerox. KPMG's bark sounded no warning to investors; its bite was toothless." In April 2005 KPMG settled with the SEC by paying a US$22.48 million fine [5]. As part of the settlement KPMG neither admits nor denies wrongdoing.
During settlement with the Securities and Exchange Commission, Xerox began to revamp itself once more. As a symbol of this transformation, the relative size of the word "Xerox" was increased in proportion to "The Document Company" on the corporate signature and the latter was dropped altogether in September 2004, along with the digital X. However, the digital X and "The Document Company" are still used by Fuji Xerox.
[edit] Trademark issues and name usage
The word "xerox" (or "make a xeroxed copy", etc.) is commonly used as a synonym for "photocopy" (both as a noun and a verb) in North American English; for example, "I xeroxed the document and placed it on your desk." or "Please make a xeroxed copy of the articles and hand them a week before the exam". Though both are common, the company does not condone such uses of its trademark, and is particularly concerned about the ongoing use of Xerox as a verb as this places the trademark in danger of being declared a generic word by the courts. The company is engaged in an ongoing campaign to convince the public that Xerox should not be used as a verb.
To this end, the company has written to publications that have used Xerox as a verb, and has also purchased print advertisements declaring that "you cannot 'xerox' a document, but you can copy it on" a photocopier, particularly "a Xerox Brand copying machine." The AP Stylebook respects trademarks. Xerox Corporation continues to protect its trademark diligently in most if not all trademark categories. Despite their efforts, many dictionaries continue to mention the use of "xerox" as a verb, including the Oxford English Dictionary. However, in the United Kingdom, where the OED is based, the generic use of "xerox" as a term is uncommon. The terms "Photocopy" and "photocopier" are normally used instead.
[edit] See also
[edit] References
- ^ The Accidental CEO. Fortune (June 2003).
- ^ Xerox looks to up stake in Indian arm to 100%. The Economic Times (March 2005).
- ^ SEC v. Xerox Corporation. SEC (2002).
- ^ Complaint: KPMG LLP et al.. SEC (2003).
- ^ SEC fines Xerox's ex-auditor. Democrat and Chronicle (April 2005).
- Copies in Seconds: How a Lone Inventor and an Unknown Company Created the Biggest Communication Breakthrough Since Gutenberg - Chester Carlson and the Birth of the Xerox, by David Owen, ISBN 0-7432-5117-2, ISBN 0-7432-5118-0
