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 user 2009-01-08 at 1:31:20 pm Views: 38
  • #21157
    Samsung: Rethinking the Printer Business
    Samsung’s bet that eye-catching design, and a partnership with Apple, would boost its share of the printer market is paying off
    September 2007, Apple (AAPL) upstaged rival electronics retailers with
    a new product available only at its 180 stores. Billed as the world’s
    smallest laser printer, the SCX-4500 offered all the must-have features
    of an Apple blockbuster: sleek good looks, buttonless touch controls,
    and easy set-up. The logo on the front, though, wasn’t Apple’s. It
    belonged to Samsung Electronics—one of the biggest suppliers of
    flat-panel televisions, cellular phones, and refrigerators in
    retailing—which created the stunning, piano-black printer. Intent on
    toppling industry giant Hewlett-Packard (HPQ), the South Korean
    consumer electronics giant spent three years working on its first
    designer printer before teaming up with Apple for its introduction.

    years, Henry Ford has had nothing on printer manufacturers. Consumers
    could have any color they wanted—as long as it was boring beige or
    gray. But Samsung principal printer designer Bong Uk Lim wanted a new
    aesthetic. His goal: to create a printer that doesn’t look like one.
    “Most companies ask people to adapt to the product instead of the other
    way around,” Lim says. “As you see with Apple, design is more important
    than ever before for most products. The same can be made true for
    New Model

    Pretty printers? It’s hardly the razor
    and blade model that has characterized the printer business, which
    topped an estimated $130 billion in worldwide sales in 2008. Consumer
    printers tend to be bulky plastic devices, built to sell at the lowest
    price possible amid expectations that companies can profit handsomely
    when customers run out of ink and toner and have to hurry to Best Buy
    (BBY) or Staples (SPLS) to buy replacement cartridges.

    In a
    well-guarded office tower in downtown Seoul, Lim gave his four-person
    design team new marching orders to create a product design so
    eye-catching that consumers might be willing to pay extra to have it.
    To get design ideas, they pored over unconventional-looking products
    from Bang & Olufsen, Nokia (NOK), and Nintendo and took apart
    products such as high-end S.T. DuPont lighters. Moving to address a
    major complaint that bulky printers take up valuable desk space, they
    designed several prototypes. One was a space-saving circular printer
    that rotates an ink cartridge to print on a page instead of moving it
    back and forth. Another contraption, a dual-hinge flat printer that
    looks like two square plates, hangs on the wall of one designer’s

    The designers settled on a slimmed-down,
    black-and-white laser printer that measured just 5 inches
    high—two-thirds the size of other desktop devices—and has a finish
    reminiscent of a Steinway grand piano. To offer function with the form,
    they added foam strips on the bottom to prevent the printer from
    rattling and installed equipment to make it whisper-quiet. Instead of
    buttons, they used blue LED lights and sensors that let users print,
    scan, and make copies.
    Paying for Style

    In Apple’s stores,
    Samsung positioned the new $299 multifunction printer as a premium
    product sold at a 25% markup over its nearest competitors, Gartner
    analyst Don Dixon notes. “Style lets vendors differentiate and create a
    strong brand image in increasingly commoditized markets, which can
    translate into higher market share and margins,” he says. (A wireless
    version of the printer, the SCX-4500W, is now available at the Apple
    Store for $349.95.)

    A year after the printer’s introduction, the
    results are encouraging. Already the world’s second-biggest printer
    maker by volume, Samsung’s U.S. market share jumped to 3.6% in
    September from 2.3% a year ago, according to market tracker IDC.
    Worldwide, the company’s market share rose 25%, to 13.4%. J.W. Park,
    president of Samsung Electronics’ digital media group, has told
    designers to incorporate the sleek finish in some way even into giant
    office printers as he moves to overtake HP as the world’s No.1 printer
    maker by 2012.

    HP and other rivals are stepping up their own
    design efforts. But David Murphy, head of HP’s LaserJet imaging
    business, says most of the industry’s profits come from selling to
    businesses, which use more ink than the average consumer. “For them,
    it’s about the whole value proposition of having a product that does
    the tasks you want it to,” Murphy says. “Then, form follows function.”