*NEWS*TONER INK IS GETTING CHEAPER

[Anonymous]

New Printer Cartridge or a Refill? Either Way, Ink Is Getting Cheaper
Bill Powell, a sports photographer in Tulsa, Okla., shoots high school and college games and sells his work to the players and their parents.
He prints on a Canon Pixma photo printer, but he does not use Canon ink. For the last eight months he has been buying refilled cartridges from Cartridge World. “I couldn’t tell the difference, and my customers couldn’t tell the difference,” Mr. Powell said. “It saves me about 50 percent.”
On the face of it, the logic of buying refilled ink cartridges seems pretty obvious. A new HP 26A cartridge, for use in about two dozen Hewlett-Packard printers, costs $29 at Staples. Buy a $21 Staples-brand remanufactured unit and you save 28 percent. Go to Cartridge World and you pay $18.39, a 37 percent discount.
Walgreens is installing cartridge refilling machines in the photo department of 1,500 of its 5,120 drugstores. Office Depot is testing the same kiosks in Charlotte, N.C., and Minneapolis. These machines, called the Ink-O-Dem, cost about $40,000 and can refill a cartridge in about 2.5 minutes. “We cut out the middlemen,” said Harry Nicodem, chief executive of TonerHead, the maker of the kiosk.
The automation gives Walgreens a price advantage: its HP 26A is $14.50. (You can also refill one yourself at home and, after you scrub the ink from your hands, save even more, 65 percent.)
End of story, right? You would go for the cheaper alternatives. But saving money is not just a matter of finding the lowest price. Two recent studies suggest that the more important consideration is the price per page printed, a number that is affected by the quality of a refilled cartridge.
Hewlett-Packard executives argue that you are wasting your money with refills, which is what you might expect the company to say. Manufacturers have a lot riding on a business model in which they sell ink cartridges that can cost a third of what the printer did.
The company has a point. QualityLogic, a Moorpark, Calif., test laboratory found that while new Hewlett-Packard cartridges had a 2 percent failure rate, 70 percent of remanufactured units did not last as long as promised. Hewlett commissioned the study, but Consumer Reports magazine came to a similar conclusion last May. Testers there found that in almost all cases, the refilled cartridges cost as much or more when evaluated on their per-page output.
Hewlett executives said that was because the company optimized each printer head – the strip of silicon containing the microscopic ink nozzles – for its printer, ink and paper. In its San Diego lab, “print head architects” use high-powered microscopes and cameras to watch the firing of those nozzles with various ink formulations made in three company labs to find the designs that work best. Lexmark International and Brother use similar printer-head technology on their cartridges. (Canon and Epson put their printer heads in the printer itself. Those companies did not respond to requests for interviews.)
Hewlett makes printer heads for some of its commercial printers that can last five years in continuous use. But the company said that its consumer printer cartridges were designed to be disposable. A printer head lasts just long enough to jettison that last drop of ink, a company official said.
Cartridge refillers have a differing opinion. They say those cartridges can be used three to seven times. And they have built a $6.5 billion industry to prove it. “It creates an opportunity for us,” said Burt Yarkin, the chief executive for the United States operations of Cartridge World, which has 1,100 stores worldwide, 350 of them in the United States. He says a refilled cartridge drives down the cost of making a color print at home to about 13 cents a print, less than most retail photofinishers charge.
The refillers have put a dent in the printer makers’ business. Market analysts at Lyra Research in Newton, Mass., which specializes in this industry, said the manufacturers were hanging onto about 79 percent of the $30.1 billon printer supplies business. The high-volume “remanufacturers,” which supply stores with refilled cartridges, have about 18 percent of the market. The refillers at retail do about $1 billion in business, but that is growing at the rate of 18 percent a year.
The impact is being felt. The migration to alternatives is a major reason net income dropped 47 percent in the fourth quarter at Lexmark International. “Consumers are becoming more aware of refilling and Walgreens effort will make even more people aware of it,” said Charlie Brewer, managing editor of Hard Copy Supplies Journal, published by Lyra.
Dave Shaw, the vice president for franchise development at Rapid Refill, a Springfield, Ore., refiller with 40 outlets, said, “It’s not a bunch of guys in the back with syringes punching holes in the cartridges.” Franchisees buy about $200,000 worth of machines that suck out the old ink, centrifuge out any remaining ink that could contaminate the new ink, rinse the cartridge with cleaning fluid and then refill it. (A Cartridge World franchisee’s equipment costs about $150,000.) “They absolutely have to worry about quality,” Mr. Brewer said.
The ink used by some of the refillers is very similar to that used by the manufacturers. For instance, Rapid Refill’s ink is supplied by OCP of Germany and formulated to perform like the ink that Hewlett, Lexmark or Brother put in originally. Cartridge World will not disclose its sources of the 150 to 200 different inks at a typical store, but Mr. Yarkin said, “We are matching their ink.”
It is no empty boast. Hewlett went after Cartridge World last October for using ink that infringes on patents for its Vivera line of inks. It demanded that the company, based in Emeryville, Calif., stop using inks with the same chemical composition. Also last year, Hewlett filed a lawsuit against InkCycle, the company that makes refills under the Staples brand, asserting that the company had violated three patents covering fast-drying ink for plain paper and methods for preventing color from bleeding on paper. The dispute was resolved when InkCycle changed its formulation.
So if the ink used by the reputable refillers is good enough to provoke Hewlett’s lawyers, it should be O.K. to use with confidence, right
The upshot is that you will not have much problem with used cartridges from reputable refillers if you are printing documents with black ink on standard 20-pound paper, what most people call copier paper. Most have money-back guarantees. You will not have much problem with color inks if the scope of your printing is maps and the children’s homework.
At half the price, even if half of what you buy fails to print as much as a new cartridge, you are not much worse off. Unless, that is, you are printing photographs on expensive photo paper that you want to keep as heirlooms for 75 to 100 years – and you might include greeting cards or company brochures in this category. Then you will want to stick with the printer manufacturer’s ink and the recommended photo paper.
Hewlett, for instance, has developed photo paper with a polymer coating that swells in thickness as it absorbs the droplet of inkjet ink. The polymer then encapsulates the ink, protecting from fading for as long as 100 years if the photo is kept under glass or in storage, according to Wilhelm Imaging Research, which tests photo longevity. The ink and paper are also tested to protect photographs from fading because of pollution, humidity and heat.
That means that two prints, one made with original ink and one with refillers, could look identical when they come off the printer. But a few decades later, the refiller’s print could fade.
What it may boil down to is how offended you are that Hewlett-Packard sells a $30 cartridge that cost it an estimated $3.50 to make (not including the hundreds of millions of dollars it spent on research and development of the technology).
But you are not going to feel much better about refillers. It costs refillers about $2 to refill a cartridge that they sell for $10 to $15. It costs them a bit more if you do not bring in an empty cartridge. The spot market price for a core, as they are called by the refillers who buy and sell the empties in Internet auctions, is about $3, but can be as much as $9.
There is a happy result of the intense fight over refills. Prices of the new cartridges have been dropping. A manufacturer like Hewlett has figured out how to more efficiently spray ink on the paper so a cartridge can hold less ink and it can drop the price to $10 or less. That disrupts the refillers’ economics and makes a 20 percent or 30 percent discount on refills look less dramatic.
Indeed, one day ink may be as cheap as Champagn

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February 6, 2006 at 10:40 AM