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 user 2007-05-15 at 2:01:00 pm Views: 36
  • #18292

    New tone in ink-cartridge sales
    Printer makers launch cheaper units, but catch is there’s less toner in them.
    understand that consumers are getting miffed at the amount they have to
    pay for cartridges.”Charlie Brewer, Lyra Research analyst
    makers such as Hewlett-Packard Co. and Eastman Kodak Co. have recently
    introduced cheaper printer-ink cartridges priced at around $15. But
    consumers may find that paying less at the cash register ends up
    costing them more in the long run.That’s because there is less ink in
    some of the new cartridges, so the cost of each page printed is
    actually higher. Also, some of the printers that accept the new
    lower-priced cartridges cost more than other printers.Companies are
    rolling out lower-priced cartridges as they increasingly compete with
    the growing market of “remanufactured” or “refilled” ink cartridges.
    Printer makers such as H-P have long sold printers for little or no
    profit, making up the loss from ink sales. But that business model has
    recently come under pressure from discount players such as Cartridge
    World, a chain store that refills empty ink cartridges, and large
    office-supply stores, such as Staples Inc. and Office Depot Inc., which
    sell their own brands of remanufactured cartridges. Many refillers
    offer cartridges at prices up to 50 percent less than those of big
    printer makers. By 2010, refilled and remanufactured ink cartridges are
    projected to account for 37 percent of the worldwide ink-cartridge
    market, up from 29 percent in 2003, according to Lyra Research Inc.H-P,
    the largest U.S. printer company, late last month unveiled new
    black-ink and color-ink cartridges for $14.99 and $17.99, respectively,
    or 25 percent and 28 percent less than previous comparable cartridges
    costing $19.99 and $24.99, respectively. In February, Kodak rolled out
    a $9.99 black-ink cartridge and a $14.99 color-ink cartridge. That same
    month, Canon Inc. released a new black-ink cartridge for $15.99 and a
    new color cartridge for $19.99, down from $19.99 and $24.99

    Less ink in cartridge
    But a closer look at some
    of the new cartridges reveals that consumers may be paying higher
    prices for their printer ink over the long run. In one comparison, an
    older H-P standard black-ink cartridge contained 11 milliliters of ink,
    while the new standard cartridge has just 4.5 milliliters of ink. As a
    result, the cost of printing with the new H-P black-ink cartridge rises
    to 7.5 cents a page from 4.4 cents a page for the older cartridge,
    according to Lyra.Canon’s new ink cartridges also come with less ink
    than their predecessors. Canon’s new black-ink cartridge contains 11
    milliliters of ink, down from 16 milliliters in the old version. That
    bumps up the cost of printing per page to 6.7 cents from 5.6 cents
    previously. Canon’s new color-ink cartridge contains nine milliliters
    of ink, for a printing cost of 15.4 cents a page, versus 12 milliliters
    previously, for a cost of 13.7 cents a page.Meanwhile, Kodak’s $14.99
    and $9.99 ink cartridges are tied to the launch of several new Kodak
    printers, which are priced higher than other printers. Kodak’s printers
    cost $150 to $300, or about $50 more than some comparable models by
    rivals.Many printer makers now want to appear to match the refillers’
    prices in order to better compete, analysts say. Charlie Brewer, a Lyra
    analyst, says printer companies started introducing ink cartridges in
    the $15 range in 2005, after the launch of cheaper, refilled cartridges
    from office superstores such as Staples and Office Depot. “Companies
    understand that consumers are getting miffed at the amount they have to
    pay for cartridges,” Brewer says.

    Wider choice of cartridges
    printer executives acknowledge the new $15 cartridges won’t lower
    consumers’ costs. “There will be cases where (the cost of printing per
    page) goes up” with the new H-P cartridges, says Pradeep Jotwani, who
    heads the supplies business for the Palo Alto, Calif., company. But he
    argues that offering the lower-priced cartridges gives choices to
    consumers who don’t print much and who simply want to save money on the
    upfront purchase.H-P has also introduced some “higher-yield” cartridges
    for people who print more and for whom cost per print is more
    important, Jotwani notes. He says there are some cases where the cost
    of printing per page ends up decreasing. In one example, H-P’s new
    color-cartridge with 12 milliliters of ink can be measured against an
    older cartridge that contained five milliliters of ink. In that
    instance, the cost per page drops to 6.7 cents from 9.5 cents
    previously, says an H-P spokeswoman.Michael Duffett, a Canon director
    of inkjet printer marketing, also says customers who don’t print much
    will benefit. “With the (small) amount of prints being made by this
    audience, initial ink-purchasing cost becomes a stronger motivation
    over cost per print,” Duffett says.

    The new cartridges are forcing at least one seller of remanufactured ink cartridges to cut back.
    February, Staples decided to stop selling its lower-priced
    Staples-branded ink cartridges that work with H-P printers, which were
    manufactured by Inkcycle Inc., an ink and toner manufacturer based in
    Lenexa, Kan.Scott Rankin, a Staples vice president, says H-P’s new
    cartridges made it too difficult for the retailer to continue stocking
    its own remanufactured cartridges since the retailer couldn’t match
    H-P’s technology in each of the new offerings.”It introduced a new
    level of complexity into the system,” he says. He adds that Staples
    will consider whether it makes sense to discontinue its Staples-branded
    cartridges for other vendors apart from H-P.”Companies understand that
    consumers are getting miffed at the amount they have to pay for
    cartridges.”Charlie Brewer, Lyra Research analyst.