KODAK "VERY POSITIVE " ON PRINTER STRATEGY

[Anonymous]

Kodak “very positive” on printer strategy
* Weak economy fears not derailing sales growth plans
* No plans to cut ink cartridge retail prices
NEW YORK, April 08 – Eastman Kodak Co remains optimistic about its unusual home inkjet printer strategy, and its inexpensive ink cartridges are selling faster on average than rival products, company executives said on Wednesday.The photography company, which has pinned growth plans on digital systems such as commercial printing and image sensors, said concerns about a weakening economy have not derailed its plans to increase sales by up to three times this year.”There is no doubt that the economic issues are a headwind. But we are expanding the … retail channels that we are participating in, expanding the number of products and the number of countries that we are playing in,” said Bob Ohlweiler, chief operating officer of Kodak’s Inkjet Systems Division. “We are feeling very positive.”

Kodak’s printing plan, launched about a year ago, calls for consumers to pay higher prices than the industry average for hardware, but get replacement ink at a bargain. Rivals such as Hewlett-Packard Co and Lexmark International Inc sell low-cost printers or bundle them with the sale of computers.Last year, Kodak sold 520,000 of the new printers, exceeding its initial target by about 20,000 units. It expects those sales to double or triple in 2008, and sees sales of $1 billion and break-even profit from this segment by 2010.The line, initially available only at Best Buy stores in the U.S., has expanded to Office Depot shops, and can also be found in countries including France and Canada.Kodak still has a long way to go to catch HP and Canon Inc , who sell millions of units each year. Moreover, each has

many millions of loyal customers with older models who regularly buy replacement ink.
The weakening economy offers another challenge for Kodak, whose printers sell for $100-$200, more than rival inkjet printers that are typically priced at below $75.Consumers who print in high volumes see the value of Kodak’s system as they buy cartridges priced at less than $20, which Kodak says is substantially lower than its competitors.Ohlweiler noted that even if the economy weakens further the company would not cut its ink prices.”We have no plans on changing the cost of the ink cartridges,” he said. “We are selling a long term value proposition. To move price on ink (is) not how we would react to a downturn in the economy.

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April 17, 2008 at 8:04 PM