ROUND TWO FOR DELL’s PRINTER & INK BUSS

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ROUND TWO FOR DELL’s PRINTER & INK BUSS

 user 2006-05-23 at 12:10:00 pm Views: 46
  • #15521

    Round Two For Dell’s Printers
    Computer giant Dell, which has struggled to expand its reach beyond its dominant PC line, is hoping a new line of printers can help the company make headway in that $16 billion market.
    The company, which has been selling printers since 2003, is rolling out six new models aimed at the higher end of the market, a shift from the consumer focus the company had originally pursued.”This is really a continuation of the printing and imaging strategy,” says Lisa Howe, director of marketing for Dell’s Printing and Imaging group. “This is an important area to have as part of our portfolio and will help us continue to grow.”Dell , which doesn’t break out specific results for its printer division, said that revenues for the unit had increased 10% over the last year, driven primarily by sales of ink, toner cartridges and paper. So-called “consumables” are typically where the printing industry makes most of its money.The five new laser printer models range in price from $380 to $1,000 and produce documents for about a penny or less per page. A new downloadable printer- and document-management software package called Open Manager is designed to go head-to-head with imaging behemoth Hewlett-Packard’s  Web Jet Admin and similar programs from competitors like Xerox  and Oki.According to technology research firm IDC, Dell shipped 5 million printing devices in 2005 and nudged out the traditional printer companies like Lexmark  and Epson for second place (at 15%) of total U.S. printer sales market share. But HP, which shipped 16 million printers in 2005, is still far in the lead.And impressive as the second-place achievement sounds, it doesn’t mean Dell has been raking in profit. Many of the printers are sold at cost, or even at a loss, to consumers, when they are bundled with PC purchases. Especially since the consumer hardware market is already bristling with competitors, “Dell’s low-end focus strategy has been a little curious,” says Ann Priede, printer hardware analyst for Lyra Research.”[They have] been following the ‘bottoms up’ approach,” but at this point, they need to move up-market, says Keith Kmetz, printer hardware analyst at IDC. “I think they recognize it’s a difficult battle on the low end.”With the introduction of the new higher-end products, Dell is regrouping for a more lucrative approach. Tweaking its offerings to suit industry trends, the company’s 3010cn and 5110cn are speedy and inexpensive color printers, and the 1815dn is a $430 multifunction black-and-white device that prints 27 pages per minute.According to IDC, although the printer market has essentially flatlined, the color laser market grew 53% between 2004 and 2005 and has a predicted compounded yearly growth rate of 18% from 2005 to 2010. The multifunction devices market is growing even faster: Between 2004 and 2005, the market grew 80% and should experience 24% compounded yearly growth for the same period.”This next step is a smart move,” Priede says. “In the first round, you have to test the waters. In the second, you apply what you’ve learned.