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 user 2008-04-16 at 2:46:08 pm Views: 43
  • #19571
    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.

    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