*NEWS*PRINTER SUPPLY REVENUE TO TOP $100B

  • clover-depot-intl-us-ca-email-signature-05-10-2017-902x1772
  • ncc-banner-902-x-177-june-2017
  • Print
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • 2toner1-2
  • banner-01-26-17b
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • 4toner4
  • ces_web_banner_toner_news_902x1776
Share

*NEWS*PRINTER SUPPLY REVENUE TO TOP $100B

 user 2006-07-02 at 9:03:00 pm Views: 75
  • #15927

    Printer Supply Revenue To Top $100B
    New
    York -Global digital imaging supplies revenue is expected to pass the
    $100 billion mark in 2006, but traditional printer companies could miss
    out on the windfall, according to imaging analysis firm, Lyra
    Research.Digital imaging supplies, also called “consumables,” include
    ink, toner and cut paper for copiers, printers and digital presses. In
    2004, global supplies revenue was $89 billion. In 2005, it jumped to
    $96 billion. By the end of 2006, Lyra predicts, it should be about $101
    billion.But printer makers (also known as original equipment
    manufacturers or OEMs) like market leader Hewlett-Packard , Lexmark,
    Seiko Epson and Canon , which charge premium prices for their brand
    name ink and toner cartridges, could lose out on revenue as other
    companies provide supplies cheaper.”The biggest threat to OEMs is this
    third party issue,” says Rodger Reis, research analyst at Lyra. “It
    goes right to their [revenue] base.”Three privately-held concerns,
    Emeryville, Calif.-based Cartridge World, Caboodle Cartridge of Palo
    Alto, Calif. and Springfield, Oregon’s Rapid Refill sell remanufactured
    and refill cartridges at 30% to 60% less than the printer hardware
    companies.For example, a brand name HP 45 black inkjet printer
    cartridge, which works in over 200 HP printers, retails for about $20.
    Rapid Refill sells a similar third party cartridge for $16.50.
    Similarly, a self-branded Canon E40 cartridge can cost more than $140.
    Rapid Refill charges $70.”People are furious about paying $40 to $50
    for an ink cartridge,” says Kelly Cahill, marketing manager for Rapid
    Refill. “That’s just too much money.”In the past, consumers have been
    somewhat reluctant to buy third-party ink because of quality concerns.
    But that perception is changing. And as reputable retailers like
    Staples , Office Depot  and Office Max  have begun offering their own
    self-branded cartridges for about $5 less than brand name supplies, the
    stigma is fading instead of the ink.”These stores have strong
    established brands, with a reputation for quality,” Reis says. “And
    they stand behind their products.”But the real money is in the
    business-to-business market. “People are still trying to figure out the
    refill business,” Reis says. “The model is to go out to these
    businesses and provide printer services, providing a working contract
    to manage an entire printer fleet.”Dell Computer has its eye on this
    market and offers its own printers, consumables and service contracts
    to businesses at 20% to 25% less then other OEM printer companies. But
    since printer hardware is a very mature market, the strategy hasn’t
    been entirely successful. And the company has no plans to enter into
    the third-party consumables market, according to Tony Mara, senior
    product marketing manager in Dell’s Imaging and Printing Group. Staying
    focused on the hardware market could be a misstep for Dell. Lyra’s
    research indicates that worldwide revenue for printers has essentially
    flat-lined at about $60 billion. There are still growth opportunities
    in emerging markets in the Pacific Rim, the Middle East and South
    America, but printers, which are already being sold at a 30% discount,
    can’t go much lower.That leaves the printer companies in a bind. They
    have to compete for printer sales while relying on the “razor and razor
    blades”–or in this case, printers and ink–business model for profit.
    “No one is willing to lower the price on supplies because that’s where
    the revenue is,” Reis says.However, HP is adamant that the company has
    been working hard to bring overall printing costs down and insists that
    its products are simply better. “It is up to customers to decide which
    solution is best for them,” says Tuan Tran, vice president of
    marketing, HP Imaging and Printing Supplies. “There will always be some
    segment of the population that is willing to accept trade-offs in
    quality and reliability to save a little money.”HP, Lexmark and Epson,
    all of whom realize a majority of their imaging revenue from supplies,
    aren’t taking the challenge sitting down. Over the years, the three
    companies have sued many third-party supplies companies for patent
    infringement–not always successfully. Epson is currently pursuing
    legal action against another 24 companies.In some cases, the legal
    pressure has paid off.”We have seen aftermarket competitors come and
    go, all while we maintained a healthy business and market share,” says
    Tran.