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AnonymousInactiveCartridge refillers get makers’ attention
Lexmark plans to focus on value(YEA RIGHT )
Peter
Healy knows how the market is supposed to work: Lexmark loses money
selling many of its printers, but it makes it back by selling
replacement ink.
So Healy knew that he was going after the
Lexington-based printer maker’s profit center last summer when he
opened a Cartridge World store that refills empty ink cartridges about
four miles from Lexmark’s headquarters.
“We’ve gotten a lot of Lexmark employees coming in and looking around,” he said.
Last
year remanufactured and refilled ink cartridges made up about 17
percent of the $11.5 billion replacement-ink market in North America,
according to Lyra Research, a Boston-area firm that tracks the printing
and imaging industry. By 2009, off-brand ink is expected to bring in 20
percent of replacement sales.
Lyra analyst Elisabeth Wightman said
refillers’ revenue is expected to grow by 22 percent over the next
three years, compared with 8 percent projected growth for branded-ink
sales.
The growth of refillers and remanufacturers has sent printer makers to the courts.
In
October, Hewlett-Packard sued Cartridge World North America, a company
that sells remanufactured cartridges and offers in-store refilling
services, for allegedly violating patents on HP’s inks. Cartridge World
is to open its first Louisville-area store in April in Clarksville, Ind.
On Tuesday, printer maker Epson sued 24 cartridge remanufacturers, claiming ink-patent infringement.
Lexmark
spokesman Tim Fitzpatrick said the company sees the refill market as a
niche business at this point, and it plans to compete by continually
upgrading its products. To address consumer concern over high cartridge
prices, Lexmark last year launched a line of cheaper units that contain
less ink.
“Our job at Lexmark is … to provide a compelling value
that gives consumers high-quality printing and the ability to choose
economical cartridge options,” Fitzpatrick said.
Jana Munford, a
Dallas-based analyst with market research firm Current Analysis, said
Lexmark and HP have little to fear from ink refillers now because the
public does not believe the smaller companies can offer the same
quality. Even Walgreens’ entrance into the market isn’t a huge problem
as the drugstore chain has never been a major supplier of printer ink.
But
if superstores such as OfficeMax, Office Depot or Staples begin
advertising heavily and guaranteeing quality, “that could start a major
change,” she said.
Healy said he doubts the refillers will force any
of the printer manufacturers out of business, but if their services
take off, it will force companies to change their business models.
“Right
now, we’re a small part of the business, but as that grows to 30
percent of the market or so, something will have to change,” Healy
said. “Who knows? Maybe HP or Lexmark will buy Cartridge World.” -
AuthorMarch 1, 2006 at 10:05 AM
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