HP… WHY OUR INKS IS SO EXPENSIVE

  • futor_902x177v7-tonernew
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • 161213_banner_futorag_902x177px
  • Print
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • 536716a_green_sweep_web_banner_902x17712
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • 2toner1-2
  • 4toner4
  • ink-direct-banner-902-x-177-v-1-2-big-banner-03-23-2017
  • banner-01-26-17b
Share

HP… WHY OUR INKS IS SO EXPENSIVE

 user 2010-05-24 at 9:49:37 am Views: 52
  • #24128
    http://blogs.wsj.com/digits/2010/05/14/h-p-why-our-ink-is-expensive/
    H-P: Why Our Ink Is Expensive
    Tired of hearing customers whine that printer ink is too
    expensive–and facing competition from ink-cartridge refillers–executives
    at Hewlett-Packard’s printing division would like to buff up the print
    giant’s reputation with consumers. So the company recently sent Thom
    Brown, who specializes in “competitive media intelligence,” on a media
    tour with a presentation called “Why Does Ink Cost So Much?” Opening a
    bag of props including a trio of shot glasses, squares of foam and some
    disassembled print heads, Mr. Brown earlier this week explained the
    complex workings of H-P print heads, and the billions of dollars the
    company has spent over the years developing them.He talked about the
    challenges in shooting drops of ink at moving pages of paper, and the
    perils of refilling ink cartridges rather than buying new ones from H-P.
    Refilling involves poking a hole in an H-P cartridge and filling it
    with a god-knows-what mixture of non-H-P ink–a process that can lead to
    smudging and other poor performance, Mr. Brown said. H-P, he added, has
    heard from plenty of customers who tried refilling. “A lot of them don’t
    have good experiences,” he said.

    In addition to
    research-and-development, the expense of ink cartridges comes from H-P’s
    high-tech testing of cartridges that break. The company uses electron
    microscopes, Mr. Brown said, to figure out what made a printhead
    malfunction. H-P has started what it calls an “Ink Amnesty Program” to
    bring back customers who have left H-P for refillers. In exchange for
    sharing your bad-ink story, the program will give consumers a 20%
    discount coupon for H-P ink.Of course it’s not just R&D that makes
    H-P’s ink costs so much. With more than 40% of the worldwide printer
    market last year, according to research firm IDC, H-P doesn’t face
    serious competitive pressure that would force it to drop prices.

    Mr.
    Brown said his area of knowledge is printing technology, not profits.
    But
    in the company’s last quarterly earnings report, H-P’s printing
    division booked more than $6 billion in sales and more than $1 billion
    in operating profit. Its operating profit margin was 17%, but Shaw Wu,
    an analyst with Kaufman Brothers, said that includes sales of low-profit
    printers. On ink alone, he estimates that H-P’s margin is somewhere
    between 20% and 30%.