• Video and Film
  • big-banner-ad_2-sean
  • Print
  • 7035-overstock-banner-902x177
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • mse-big-new-banner-03-17-2016-416616a-tonernews-web-banner-mse-114
  • 4toner4
  • 2toner1-2
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212


 user 2006-11-29 at 2:13:00 pm Views: 43
  • #17090

    Color-laser economics
    Pressures in printer marketplace squeeze consumers, producers alike
    consensus at one time was that a laser printer proved profitable on its
    sale alone.But because of fierce competition for customers, some color
    laser printers are becoming like much of their inkjet brethren — think
    those $20 inkjets — which long ago gave up hopes of initial
    profitability and pinned their prospects to selling multiple
    profit-laden ink cartridges over time.And why not? The cost to replace
    the four toner cartridges in some color lasers equals, and sometimes
    exceeds, the cost of the printers.But the problem lies with customers
    who don’t print enough, leaving companies like Lexington’s Lexmark
    International aiming for the high-volume customers in a high-growth
    product segment that, as one analyst says, includes the newest wave of
    disposable printers.

    Sticker shock
    A disposable printer is one that costs less than its replacement supplies, such as toner.Such
    printers are prevalent in the inkjet business, where consumers are
    sometimes given a printer for free or can buy low-end single-function
    inkjets — no scanning, copying or faxing features — for easily less
    than $50.But manufacturers of laser printers had resisted that
    race-to-the-bottom price competition until recent years. The price
    slashing became commonplace in the color laser segment because of the
    replacement toner’s lucrative revenue potential.”Color laser utilizes
    four times the consumables that monolaser does because they have cyan,
    magenta, yellow and black,” said analyst Philip Grote of Current
    Analysis. “So you’re using basically four times the toner, which means
    more revenue.”Consider the costs for Hewlett-Packard’s Color LaserJet
    1600, priced at $299 on HP’s Web site. A replacement set of the
    cartridges: $323.97.And although it would seem unconventional for
    customers to unplug their current laser printers and buy new ones, it
    can happen in small office and home office settings, Grote said.Those
    customers might not have computer networks, so it’s simpler to just
    unpack and plug in the new printer, and stow the older one, he
    said.Many companies ship new color lasers with starter cartridges that
    are filled with less toner than replacement cartridges, though, so a
    new printer’s cartridges wouldn’t necessarily print the same number of
    pages as replacement cartridges.Larry Jamieson of Lyra Research said he
    remains skeptical that customers would buy an entirely new printer,
    pointing out that supply purchases are often staggered. But he noted,
    as Grote did, that customers become more judicious in how much they
    print because of the cartridge sticker shock.The high prices can also
    dissuade customers from purchasing a color laser in the first place,
    Jamieson added.Grote said sticker shock was common with different types
    of Lexmark printers in past years.But the company’s newest color laser
    printer lines have “really stepped up the game,” he said, emphasizing
    that the company’s higher-yield cartridges help reduce the overall cost
    of printing.

    Unprofitable hardware
    why do companies mark down their laser hardware prices to the point
    that sticker shock’s a very real phenomenon? In a word: growth
    color laser segment is one of the fastest-growing product segments in
    the printer industry. In 2005, the market for color lasers grew almost
    50 percent, according to market research firm IDC. In the first half of
    2006, it’s grown almost 30 percent.Monolasers, by comparison, grew 20
    percent in 2005, and 15 percent in the first six months of this
    year.Color lasers remain only a small part of the laser market, though.
    They accounted for 13 percent of total laser units in 2005, according
    to IDC. But they are expected to be 22 percent of laser units in 2010,
    a Lexmark executive said at a recent analyst conference.Part of that
    growth is driven by their affordability. Prices have fallen
    dramatically, as they have for all printers.The lower prices make
    low-end color lasers available to a larger base of customers, including
    small and medium-size businesses, who might not have been able to
    justify the expense years ago. And with more customers come higher
    revenue expectations.By 2010, color lasers are expected to account for
    22 percent of the laser units sold, but 53 percent of the revenue in
    the market, Lexmark Executive Vice President Paul Rooke said during the
    company’s recent Analyst Day event.So printer companies, Grote said,
    raced to enlarge their installed base of printers among customers –
    primarily businesses — by slashing prices, especially on lower-end
    products.”As soon as the printer is installed in the office, you’ve
    planted your Trojan horse. Then nobody is watching the printing costs,”
    Grote said.To get that initial buy, however, low-end color laser
    printers are generally thought to be sold at a loss.”Clearly, people
    are being very aggressive on price, taking losses up front, they’re
    hoping to make it back over the life of the product in the supplies,”
    said Lexmark CEO Paul Curlander during a recent conference call with
    analysts.”It’s pretty clear that the color laser business has become
    like the inkjet business,” he said.The idea of selling a printer at a
    loss is not new.Jamieson said a past Lyra Research study estimates that
    printer manufacturers lose about $30 on each inkjet printer sold for
    $150 or less.At $200 price tags, the companies are still “losing a
    bit,” he said.Traditionally, laser printers were sold at a profit. But
    competitive pricing has led Lyra to suggest that low-end monochrome
    lasers priced below $200 are probably sold at a loss by their
    manufacturers.And Jamieson said any color laser sold for less than $500
    and “maybe even higher than that” is probably below cost.

    Frequent printers
    The upfront losses necessitate that companies find heavy users of printers to meet profit expectations.Jamieson
    said that besides large enterprises, a good color laser customer can be
    a small or medium-size business like a marketing company, or even
    churches and real estate firms that want to release color
    brochures.These small and medium-size businesses are becoming a
    battleground in the printer industry with companies offering more
    affordable products.”The difficulty is that as the market goes down, as
    more vendors come around, it drags people down,” Jamieson said.It can
    drag the prices so low that the printers become affordable for
    individual consumers who might not print enough copies to meet
    manufacturers’ hopes, he said.Jamieson said Lexmark has shown
    “admirable restraint” in avoiding those steep price cuts, choosing to
    target high-usage customers.Emphasizing the importance of high-usage
    customers has become a recent mantra for Lexmark executives when
    discussing the color laser segment.”It’s not so much about the market
    share and the units, per se, it’s the pages,” Curlander told analysts.

    Comparing printer, toner prices
    HP Color LaserJet 1600
    Suggested printer price: $299
    Replacement toner: $323.97

    Lexmark C500n
    Suggested printer price: $349
    Replacement toner: $385.35

    Dell Laser 3010cn
    Suggested printer price: $299
    Replacement toner: $25