CANADA:HP TAKES A SWIPE @"REMAN" MARKET !

[Anonymous]

HP takes a swipe at the “remans” market, claiming that remanufactured cartridges won’t be worth your ink.
Execs and an analyst attempt to balance the cost issues     
Hewlett-Packard Canada wants users to know that if they cheap out by buying toner and ink cartridges, they’re getting what they paid for.At a factory tour here this week, company representatives went to great lengths to distance original company consumables from remanufactured laserjet toner cartridges (or “remans”) and “drill-and-fill” recycled inkjet cartridges, and the notion that they’re commodity products.The print cartridge is 70 per cent of the imaging system, said HP Canada category business manager Mike Oreskovic. And while a simple cost-per-page price analysis shows remans to be cheaper by anywhere from 10 to 40 per cent, hidden costs – in reliability, quality, performance and productivity – tilt the balance in favour of original product, he said. He quoted third-party research by QualityLogic suggesting that four out of five remanufactured toner cartridges don’t consistently meet print quality specifications, give out before their time or are just DOA.On the inkjet side, HP ink chemist Fiona Coyle said while the company’s printers and cartridges are developed together, the ink comes first. “It’s taken very seriously,” Coyle said. “It is the thing that differentiates our product.” Coyle and Oreskovic pointed to characteristics of each that define the difference between HP product and third-party refills. In the case of toner, the chemically grown particles are spherical, leading to consistency in distribution, while reman toner is crushed and irregular. On the ink side, HP’s are chemically designed to keep colour from bleeding into blacks for crisper edges.And HP Canada category manager Anthony Faga ran through what he called a list of myths about remanufactured supplies – that remans save money, that their page yields are equal, that they meet HP’s specs (which are proprietary and unreleased) among them.Though the inferiority of remans was a theme returned to time and again during the session, Faga said HP wasn’t teeing up a campaign to go after the remanufactured product. “There are choices out there,” he said, if muss, fuss and hassle aren’t critical to users. But Oreskovic noted that with drill-and-fill franchises growing and aggressively marketing their services – “We know it’s growing, but we don’t know to what extent,” he said – there’s market share to be gained for HP, in the position of competing for share in the supply of its own consumables.The cartridge market for 2006 is almost $1.5 billion in Canada, according to analyst firm Partner Research Corp., with about 28 million ink cartridges and almost a million toner cartridges projected to ship. HP dominates the market, said PRC’s Michelle Warren.A couple other remanufactured thorns in the side of HP as a printer company. Claims of the environmental benefits of buying recycled toner cartridges are overstated, according to Faga. Many toner cartridges they acquire can’t be reused because complex parts are worn out and they end up in landfills anyway, and a toner cartridge recycled under HP’s Planet Partners program has no more environmental impact.As well, customers often attribute toner problems to the printer –- and HP itself – instead of the cartridge, Faga says.Warren agreed that the TCO might play in HP’s favour, but tempered her comments with an “it depends.” For example, is it a laser or an inkjet cartridge? (QualityLogic suggests that original inkjets are 35 times more reliable than refills, while toner cartridges are nine times more reliable.) But there’s also the issue of printer damage from rebuilt cartridges, which tend to negate the printer’s warranty. “Welcome, increased costs,” Warren said.Often, Faga said, to match page yields of original equipment, rebuilt toner cartridges are overfilled, with the accompanying risk of damage to the printer.“Rebuilt cartridges are like a trick play in football,” said Greg Michetti, president of Michetti Information Services in Edmonton. “There are too many things that can go wrong.”

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November 7, 2006 at 11:33 AM