WAL-MART TO SELL KODAK INKJET PRINTERS

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Wal-Mart to sell Kodak inkjets
September , 2007— This could be the beginning of the end of the so-called paperless society.
In a move that could generate reams of hard-copied documents and photographs in homes across America, Eastman Kodak Co. announced Monday that its most affordable inkjet printer is now available at 2,600 Wal-Mart stores.The move to sell the EasyShare 5100 All-in-One Printer at the nation’s largest retailer also included a $20 cut in price on the printer to $129.99 and a limited promotional offer to include three five-color replacement ink cartridges with the sale.Kodak hopes to create a new market of computer and digital-camera users who won’t think twice about hitting the print command, said company spokesman Dave Lanzillo.”Consumers have explicitly told us that the real barrier to printing is the high cost of ink,” Lanzillo said. “We’re changing that model by making inkjet printers easy, affordable, accessible and, now with Wal-Mart, widely available. We’re changing consumer behavior by enabling them to print as much as they want to.”Kodak broke into the $45 billion inkjet printer market in February with the introduction of three models. The EasyShare 5300 sells for $199, while the 5500 sells for $299.With printer prices starting under $50, the Easy- Share occupies a price point at the middle of the market. But Kodak is hoping a technology that allows it to sell ink at lower cost will attract buyers.

All three printers use black-ink cartridges that sell for $9.99 and five-color cartridges that sell for $14.99, prices that Kodak says can cut consumers’ printing costs by up to 50 percent. Hewlett-Packard Co., the printer industry leader, disputes that claim.Kodak’s move into Wal-Mart more than doubles the U.S. shelf space for the EasyShare 5100, which had been available only at the 742-store Best Buy chain. Bestbuy.com on Monday listed the EasyShare 5100 at $149.99.Wal-Mart spokeswoman Marisa Bluestone said the EasyShare 5100 fits well with the company’s business plan.”At Wal-Mart, we are always looking to provide our customers more value for their every need, and this new Kodak printer is an example of that,” she said.Kodak’s stock closed Monday at $26.66, down 71 cents. But with two other recent news events at Kodak, it was unclear what factors were affecting the movement.Kodak also announced Monday that IBM has agreed to provide hardware and software support services for Kodak picture kiosks in six South American countries.And Sunday, the company said it has reached an agreement that allows Ricoh Americas Corp. to sell several Kodak commercial printing products.Larry Jamieson, an imaging industry analyst for Lyra Research of Newtonville, Mass., said the Wal-Mart placement should eventually have a positive influence on Kodak’s stock.”As soon as you say ‘Kodak and Wal-Mart,’ it should have a good effect,” he said. “I would think Wall Street would see that as a positive. But that’s logical and that’s never something I associate with Wall Street.”The move signals Kodak’s commitment to the inkjet printer market, Jamieson said, noting that Kodak will have to ramp up production to fill the Wal-Mart orders. But he also said the $20 price cut moves the EasyShare 5100 toward the low end of the printer spectrum, where buyers tend to be more frugal with their printing decisions.And by giving away three ink cartridges —enough to last many users two or more years — it could be a long time before Kodak sees a return on its investment, Jamieson said.Still, Wal-Mart’s position atop the retail world should help Kodak position itself as an inkjet printer company, he said.”Even if you connect with a few of these people, it’s a plus,” Jamieson said. “Is it an offensive strategy or a defensive strategy? I think it’s a little bit of both.” 

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September 11, 2007 at 10:32 AM