*NEWS*HP JOINS IN RETAIL PHOTO MARKET

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HP joins in retail photo market
New self-service printing kiosks finish a complete consumer package Hewlett-Packard is betting that consumers are ready to embrace the full range of digital photo-printing possibilities – and that retailers will trust HP to deliver them.
With a strong lineup of specialty printers, papers and inks, HP has always been a major market force in at-home printing of photos from digital cameras.
Last year the company acquired a substantial presence in the Internet end of the business with its purchase of the Snapfish online photofinishing service.
Now HP is going after the last remaining piece of the digital photo imaging market: retail.
Today the company plans to introduce a suite of products aimed at consumers who still prefer to make prints the old-fashioned way – by going to their neighborhood drugstore, supermarket or camera shop.
The move “completes the troika” of photo-processing services for HP, said Rich Duncombe, vice president for retail photo solutions. “We have the home, we have the online, and now we have the retail.”
The Photosmart Express Station is a self-service kiosk resembling a touch-screen ATM. It has a half-dozen ports that accept every major digital image storage medium, from a memory stick to a DVD.
Incorporating scalable inkjet printing technology and image processing software developed in Corvallis, the machine can produce a batch of fully dry, ready-to-handle 4-by-6-inch prints in under five minutes, HP claims. Payment is on the spot with the swipe of a credit card.
The other, more ambitious part of the package, called the Photosmart Studio, lets consumers turn their photos into a wide array of personalized products, from albums to posters and greeting cards to calendars.
Following the “one hour” format popularized by the last generation of film processors, the Studio is set up to let customers place an order using a self-service kiosk like the Express Station, then return to pick up their goodies after completing their other errands.
The Studio would use both inkjet and laser printers for various printing tasks. It also comes with bindery equipment and a CD burner for customers who want to store photos on disc.
Store employees would collect payment, do album binding and handle other tasks.
“What this enables the retailer to provide to the consumer is a broad range of choices,” said John Cronkrite, director of worldwide sales and business development for HP. “We’re bringing forth a plethora of new capabilities the industry doesn’t have.”
The whole Photosmart suite, including an Express kiosk and the complete Studio setup, will sell for $50,000 – about half the cost of a traditional silver-halide photo-processing system, according to Cronkrite.
Hewlett-Packard officials have not released price information on any of the Photosmart printing services, saying retailers will set their own rates.So far, Albertsons, Bashas’ Supermarkets and Longs Drugs have signed on with the HP program. Longs plans to introduce the Photosmart Studio in 100 of its 470 stores between April and June.
The other retailers have not yet announced their plans, but Bashas’ has about 150 stores in the Southwest while Albertsons (recently sold to a consortium of other companies) has 2,500 stores in 37 states.
In addition to selling the photo processing equipment, HP also stands to cash in with follow-on orders of ink, paper, toner, binding supplies and other consumables.
Hewlett-Packard faces significant challenges in trying to break into the retail photo processing arena, said Ron Glaz, who manages the digital imaging program for market research firm IDC.
The print-making kiosk territory has been pretty well staked out by Kodak, Fujifilm, Sony, Lucidien and Pixel Magic, Glaz said, while HP’s brand is a newcomer in retail processing.|“Those five vendors represent about 90 percent of the kiosks out there in that market,” he said.“Most of the major retail chains … are covered by Kodak or Fujifilm.”
On the other hand, Glaz said, the concept of a one-hour in-store processing center that can deliver “creative solutions” such as photo albums, greeting cards and calendars is new to the retail market.
“They bring to the table a lot more than just the kiosk,” Glaz said. “They can really bring the full digital photo printing solution to a retailer.”What’s more, HP may be able to offer retailers more attractive margins on prints because its printers are more cost-effective than the industry standard dye-sublimation technology used by most of the current kiosks.
“Their true advantage is their using inkjet print solutions,” Glaz said.
Ultimately, he said, the market – both retailers and consumers – will determine the fate of HP’s venture into retail photo processing“There’s a couple of things that need to happen,” Glaz said. “Retailers need to buy the photo solution, but they also need to educate the market that there’s more you can do than just print 4-by-6 and 5-by-7s.

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February 28, 2006 at 11:28 AM