HP GOES OUTSIDE THE BOX………….
HP GOES OUTSIDE THE BOX………….
2008-04-16 at 2:45:12 pm #19809
HP Goes Outside the Box to Save Print Dominance
Hewlett-Packard keeps pace with market demands as smaller printer rivals jockey for position.
Four times a year, Gartner and a host of other technology research firms issue updated surveys on the printing business—looking at total units shipped and breaking out market-share.Because of HP’s longstanding dominance in printing, these surveys can often read like a report on how far the number two and number three players are behind HP.In its most current survey, for instance, Gartner shows that HP held the leading market-share in page printers, inkjet printers and inkjet MFPs (multifunction printers), the all-in-one machines that combine printing, copying, faxing and scanning functions, and are currently one of the growth engines of the printing business.So great is HP’s lead in the inkjet MFP market, for example, that as of the third quarter of 2007 (the latest period for which data is available), it held a 51 percent share of the market, while its nearest competitor, Lexmark, had just a 20 percent market-share. The number three player, Canon, had just 9 percent of the market.
HP’s dominance tends to overshadow the more incremental progress of smaller companies, such as Lexmark, which grew its share of the inkjet all-in-one printer market to 20 percent by the third quarter of 2007, up from 17 percent in 2006. Canon also boosted its share of the key inkjet all-in-one printer market, to 9 percent in the third quarter of 2007, from 8 percent in 2006, according to the Gartner numbers.”HP is running over everybody,” says Jeff Embersits, an analyst with Shareholder Value Management. “I would not want to be another player in that market right now.”The printing industry is in a state of flux these days as consumers and businesses seek better, more efficient ways to print real-time and personalized materials and neither HP nor any of its smaller rivals expect the status quo to continue for long.HP, whose printing business once focused on the sale of printing machines and ink cartridges, is increasingly working to integrate software and services into the business to help create new ways to sell to customers who are no longer satisfied with a 5 x 7 glossy image, but want that image embossed on a holiday card or small business marketing material that looks professionally produced.
Some of HP’s smallest competitors, meanwhile, see the shifting industry trends as an opportunity to reinvent the wheel and offer consumers better ways to do their basic printing.Last year, while HP forged deeper into printing software and services, Eastman Kodak announced that it would enter the inkjet printer business for the first time with a new model—with ink cartridges that Kodak claims will cost less than half of what bigger players like HP charge. Ink cartridges are the proverbial razor blades of the printer business that reliably generate revenue long after the printer itself is sold.
Kodak’s claims can be hard to prove since a printer cartridge lasts for shorter or longer periods of time depending on the materials being printed and the type of paper that is used. Kodak’s early results show that consumers are intrigued though. The company sold out of all the new printers it had available during the fourth quarter.Are consumers tired of the old “cheap printer, expensive cartridge” model? “I think they are,” says Robert Toomey, an analyst with E.K. Riley Investments in Seattle.Likely a bigger key to future leadership in the printing business will be the introduction of new digital printing technologies, which currently encompass just 10 percent of the printing business in the United States. These technologies are critical to printing the sort of personalized and on-demand materials that are driving so much printing today.HP says a deeper push into digital printing is central to its overall printing strategy, as well as its strategy for retaining a lead over the competition.