Fujifilm-Xerox Partnership Nearing End

In just about two weeks, the 58-year partnership with Xerox and Fujifilm in Fuji Xerox will come to an end.

The move comes after Fujifilm’s bitter, failed struggle to acquire Xerox – largely stymied by Xerox majority investor Carl Icahn – and followed by Fujifim’s buyout of Xerox’s stake in Fuji Xerox.

Fujifilm is also changing the name of its now wholly owned Fuji Xerox to Fujifim Business Innovation, effective April 1st. The Fujiflm-Xerox Technology Agreement will end on March 31st.

Fujifilm Business Innovation and Xerox will continue to supply products to each other. However, technology and brand license restrictions, as well as sales-territory restrictions, will no longer be in effect.

For its part, under the Technology Agreement, Fujifilm has been restricted to the Asia-Pacific region under the Fuji Xerox brand, while Xerox had been free to operate outside of Asia-Pacific, with a strong presence in North America and Europe.

Fujifilm recently said the ending of such sales-territory restrictions will pave the way “for Fuji Xerox to expand its business worldwide under a new original brand.”

The firm also said it will “swiftly work to strengthen its document and adjacent businesses, and expand into new business areas.” Fuji Xerox aims to foster innovation with the other companies in the Fujifilm Group by accelerating the market introduction of solutions and services that build on technologies related to the cloud, artificial intelligence, and the Internet of Things.

Kouichi Tamai, president and representative director of Fuji Xerox, commented: “Fuji Xerox is now strongly positioned to conduct businesses dynamically and with more liberty in a truly global manner. Today’s announcement of ending the Technology Agreement with Xerox Corporation opens doors for Fuji Xerox to, after April 2021, utilize our own technologies and synergize with technologies owned by other Fujifilm Group companies to produce/market products and solutions under our own new brand worldwide.”

Expansion into U.S. and Europe

Fujifilm has stated it will seek to expand into current Xerox territories – the U.S. and Europe, with Tamai stating: “These new exciting steps are for all our customers – both our current customers in the Asia-Pacific region as well as our future customers in the U.S./EU region.”

Tamai also stated that the changes will also enable Fujifilm to operate more efficiently: “Additionally, becoming a wholly owned company of FUJIFILM Holdings Corporation as announced in November enables us to make business decisions more efficiently regarding investing in new businesses, building alliances, and pursuing acquisitions with a worldwide perspective.”

The firm stressed that the product supply agreement with Xerox Corporation will continue to be effective despite the expiration of the Technology Agreement, and Fuji Xerox and Xerox Corporation will continue to act as each other’s product supplier.

Our Take

The big question is what effect will the end of the agreement have. Fujifilm has been strong in stating that it will expand its sales territories, particularly in the U.S. and Europe. However, Xerox has not publicly stated that it will expand in the Asia-Pacific region.

Such expansions by either company would likely require significant sales infrastructure investment. It remains to be seen which company will do so.

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