Hp Will Raise Prices for Printers that Are Used With Non-Hp Ink Cartridges.

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Hp Will Raise Prices for Printers that Are Used With Non-Hp Ink Cartridges, So That The Hardware is More Profitable.
From layoffs to how consumables will be made going forward. The 3rd party aftermarket toner industry will pay the price for China’s greed. Hp will offer some lower-priced printers, but employ new technologies to ensure they are only compatible with HP ink. 

Change In Print Business Model

While HP has long offered subsidized printers to customers—with the expectation of generating revenue from sales of supplies—that model will soon start to change, executives said Thursday.

“We are challenging the status quo and making bold moves to pivot our transactional business to provide greater choice,” Lores said. “Which means customers will be able to choose between paying a higher price for hardware and having a more flexible supplies model, or buying a subsidized hardware unit that will only work with HP Original Supplies.”

Tran said the shift will take place “in the years ahead.”

Along with buying discounted printers that only work with HP-branded supplies, “customers can pay for the full value of the HP printer up front, gaining the flexibility for supplies,” Tran said. “This is like buying an unlocked cell phone and then choosing your own wireless carrier. In these cases, customers can enjoy HP’s superior printing hardware, but obviously take risk if they choose alternative supplies.”

In this model, “we rebalance the system profitability by monetizing innovation through increased hardware prices,” he said.

“We know this transition is going to take time. And it could include trade-offs in market share and hardware growth in order to maximize long-term progress,” Tran said. “But in the end, we’re going to end up with a more balanced systems model.”

To that end, “we’ll begin to systematically increase hardware prices that move towards this model,” he said. “As a result, supplies—while still very, very, very important to us—will no longer be the singular metric to determine our progress.”

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October 4, 2019 at 11:10 AM