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Color expert Pantone presss into replacement ink
Monday November 24,NEW YORK, Nov 24 (Reuters) – Pantone Inc., a developer of corporate color design systems, on Monday said it would sell replacement ink for printers made by the likes Epson and Hewlett-Packard Co, hoping its popular name will help its grab a piece of the $21 billion market.Pantone joins a cadre of companies, led by office supply superstores like Staples Inc. (NasdaqNM: color=#0000ff SPLS – color=#0000ff News), already selling third-party replacement supplies for inkjet printers, an act viewed by printer manufacturers as intrusive and, in some cases, illegal.
Based in Carlstadt, New Jersey, Pantone, whose technology helps customers in industries such as printing, publishing, and textile manage the color of their products, said its first foray will address wide-format printers used by professional photographers and graphic designers, who are already familiar with Pantone’s brand.
Its inks will dry quicker and are less likely to fade over time, boasts Richard Herbert, president of Pantone, in an interview with Reuters.
“We are the first company to offer the consumer an alternative in the high quality market,” he said. “We are going to the audience that knows Pantone.”
Pantone’s first wave will cover about 8 professional printers made by Seiko Epson Corp’s (Tokyo:6724.T – color=#0000ff News) Epson brand, including ink, paper and other after-market goods.
By 2004, the company hopes to sell products for low-end desktop models for other printer brands, by highlighting its lower prices and expertise in bringing the accuracy of colors to printed copies.
$20 BILLION INK MARKET
In a statement, Epson spokeswoman Pam Barnett said that the company recommends its customers use Epson ink to avoid “inferior image quality and printer malfunctions.
“Print quality can suffer … with cartridges or refill inks that are not specifically designed for use with Epson printers,” she said.
Even minor success in this arena could be a boon for Pantone, which is privately held. What’s more, any growth in third-party ink sales chips away at a chief profit driver for printer companies — more than half of Lexmark International Inc’s (NYSE: color=#0000ff LXK – color=#0000ff News) revenue is derived from sales of consumables.
Larry Jamieson, an analyst at research firm Lyra Research Inc., said that in the photo specialty market, the area at which Pantone is initially aiming, sales topped $1.6 billion in 2002, or about 8 percent of the nearly $21 billion replacement supplies business.
“(Pantone) would be able to pick up a chunk of that, by going in where people are looking at different types of third-party products,” he said. “With the name Pantone, that is something that would be recognized for color, and that is what other third parties have not offered.”
However, such success may irk printer companies which have already attempted to legally keep third-party ink makers out of the supplies business.
One printing industry expert also notes that most printer companies license Pantone’s color management systems, which help make sure, for example, that the exact blue a machine prints is uniform. Moving into the ink business could damage their relationships with some key customers.
“They work with these companies on color matching and have agreements — they might be jeopardizing these relationships,” the expert said. “(Pantone) might not do very well (with ink) and then they may have also burned their bridges with the companies they have been doing business with.”
Pantone’s Herbert said the company has in the past approached HP, Lexmark and Epson about improving color technology in printers, but found that the manufacturers were not interested.
“We knew we could do something better, but there were no takers,” he said. “So we said, ‘Lets do it ourselves.’ Pantone stands for color more than Epson or HP does.”
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