Currently, these operating results are not reflective of where we want to be.
We are going through a period of declining end-user demand in inkjets and I think that will continue though 2006.
On the inkjet side, we have seen a slowdown and we need to understand what that is. So the first thing we've got to do to get that moving is start to move the branded unit sales, which is another reason why we're adjusting the price position on the products and driving more aggressively on the promotions.
We really think the usage pattern over [product] life was different from what we assumed previously. Whether we always had that wrong or there's been a change is hard to say.
What we have seen is less than expected end-user demand. We don't know what is causing it. If I were to guess, I would put weak sales of (Lexmark-branded printers) on top.
Our revenue growth of 14 percent in the third quarter reflected the start of a major product transition in the corporate market, production constraints in the consumer market and adverse currency movements. Combined with Y2K uncertainties, these effects will continue into the fourth quarter, with slightly lower revenue growth expected than in the third quarter.
For the year, sales to Dell were $782 million and represented 15% of our revenue. This compares to Dell revenue of $570 million in 2004, which was about 11% of our total revenue.
The answer for this is we need to get our hardware sales moving in terms of units, particularly branded units.
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