HP TO SPEND $1Billion ON CARTRIDGE SECURITY FEATURES

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http://www.itweb.co.za/sections/hardware/2009/0904201042.asp?O=FPTOP&S=Business&A=BUS
HP will spend over a $1 billion on new security features for its printing products
Johannesburg,  April 2009   – a cost it says will only increase in the next few years. In response to the increasing sophistication of counterfeiters, the company says this expenditure has become a necessity.“Ten to 15 years ago, you could always tell if a product was real or not. Now they make the product virtually the same and the customer is not convinced they have bought anything other than the original,” says Tina Rose, EMEA anti-counterfeit programme manager at HP.The company has introduced colour-shifting technology to its security labels and says it will change its packaging and introduce new security features every 12 to 18 months. The new label will cost the company twice the cost of its previous label, but is an extra investment that Rose says is essential.“Security labels have been counterfeited before. We’re hoping this security label is difficult to counterfeit – but we are already thinking of the next one. Someone will counterfeit it – even if they don’t do it very well,” notes Rose.While she says the highest cost to HP currently is damage to its reputation, global estimates show possible large financial losses for the company. The Organisation for Economic Co-operation and Development estimates the annual value of international trade in counterfeit goods at $200 billion. The World Customs Organisation and the International Chamber of Commerce estimate 5% to 8% of trade in brand-name goods occurs through illegal trades in printing supplies.Rose says it’s not possible for the company to even estimate how much this crime is costing it because it is still an underground activity.  “Counterfeiting is linked to organised crime. It takes money, investment and time to do it. They create distribution networks; they have people who refill and repack the goods and people who sell them. In 95% of the cases, the printing supplies are bought from businesses. It’s hugely organised.

Regional solutions
HP states that since 2008, local authorities have seized 150 681 counterfeit products in Egypt, Kenya, Nigeria and SA. The anti-counterfeit programme implemented in Kenya was successful and a local programme for SA will be implemented, says Rose. She adds that this is expected to yield similar successes within the next six to nine months.“It’s significant that we tackle it in all regions. Once we identify resources with the necessary knowledge, we can then implement a programme in a specific country, which will impact on local businesses.”HP says that, according to its agreements with channel partners, companies are subject to unannounced audits. Rose states that, of the companies audited last year, 97% passed, while 3% failed – mostly for refusing HP access to their premises.

Harmless crime
Consumers need to become extra vigilant, says Rose. Security labels should be checked along with the quality of the packaging, while print cartridges should be carefully examined and supplies should only be bought from authorised sales channels.Despite attempts at tightening legislation, the problem will continue to grow with changing attitudes, says Rose.“Counterfeiting is still seen as a white-collar, victimless crime and, in many countries, counterfeiters will receive short-term sentences. It’s essentially – at the moment – a low-risk, high-profit operation. It needs to be seen as a very serious crime, with serious consequences – and not a victimless crime.”

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April 28, 2009 at 12:24 PM