*NEWS*IS KODAK STARTING AN INKJET WAR ?
*NEWS*IS KODAK STARTING AN INKJET WAR ?
2007-02-08 at 11:23:00 am #17764
Is Kodak Starting an Inkjet War?
Kodak may have fired the first shot in the inkjet wars. Analysts said the introduction of three printers that use much cheaper ink will pressure rivals to respond.
Unveiled in New York, the three All-in-One EasyShare printers boast black and color ink cartridges priced at$9.99 and $14.99, respectively. Brand name inkjet cartridges usually cost around $30. The ink prices will allow consumers to produce 10-cent prints.Kodak said the three printers, priced $149.99, $199.99 and $299.99, will be offered in March first exclusively at BestBuy, then online.But beyond the consumer impact, Kodak’s entry into the inkjet market could reshape a high-profit industry analysts say is worth $32 billion worldwide.”After today, the inkjet market will never be the same,” Kodak CEO Antonio Perez said. The company believes the high cost of ink limited more printing. The announcement comes as a long-successful “razor and blades” sales campaign is under increasing threat.Like the companies that made more money selling replacement blades than selling the razor, market-leading printer companies, including Hewlett-Packard Epson and Canon have enjoyed up to a 70 percent profit selling ink.But that revenue is under threat by lower-cost, after-market ink. Charles LeCompte, president of Lyra Research, said after-market ink represents 30 to 40 percent of the market. In China, non-brand-name suppliers sell 90 percent of the ink.HP was a “little perplexed” by Kodak’s “unproven” technology, Tuan Tran, vice president of marketing for the printer maker’s Imaging and Supplies division, said.For consumers, the Kodak announcement will result in less hesitancy in printing digital pictures at home. The cost of home printing, which is now around 25 cents per photo, will equal that of online printing services, said LeCompte. Kodak’s entry into inkjet printing forces competitors to act, he added. “They can’t stand still,” he said. “We’ll likely see a price war.”While we won’t likely see cheap inkjet printers jump $100, “they’ll fade out lower-priced products over time,” said the analyst.One result of the Kodak decision will be less bundling. Ian Hamilton, printer analyst with Current Analysis, said 40 percent of inkjet printers are now bundled with a computer or other device. Kodak decided to forgo bundling, an area that rarely translates into ink sales.Other vendors have tried similar price cuts, but the cartridges contained less ink, InfoTrends Director Bob Palmer said.Can Kodak gain market share? Palmer said Dell bought its second-place status in the inkjet market by undercutting competitors.It’s “absolutely vital” Kodak succeed in its inkjet printer bid, said Lecompte. Revenue from film for Kodak has shrunk to 25 percent. Without digital SLRs — the only profitable segment in the digital camera market — printers become increasingly important for Kodak.”They’ve bet the ranch on this.”
Kodak’s consumer printers aim to chop ink costs
Eastman Kodak announced a new line of inkjet printers on Tuesday that are geared toward everyday consumers and designed to cut down on ink costs.
The Kodak EasyShare All-In-One machines, as they are called, mark the company’s first entry into the consumer market for inkjet printers. Kodak is touting them as “revolutionary,” based on their ability to print both high-quality photographs as well as documents while chopping ink costs almost in half.Citing a study by market research firm InfoTrends indicating that consumers consider the cost of ink and supplies an obstacle to printing documents and photos from home, Kodak has centered its All-In-One line around cutting down on ink costs. The printers use Kodak’s own ink, which costs $9.99 for a black-and-white cartridge and $14.99 for a color cartridge.According to Kodak, an All-in-One printer with this ink will be able to produce twice as many documents or photos as a competitor’s printer and ink would at the same cost. The company also sells a “Kodak Value Pack,” which it claims will reduce the expense of printing a 4×6-inch photo to 10 cents.”You are throwing that (technology) away and buying a new one every time you buy one of their cartridges, which is pretty expensive stuff, said Cheryl Pohlman, a marketing director at Kodak. “With our system, we have put that print head right into the printer…so all you have to buy is ink.”She notes that the products close a loop, of sorts, for Kodak, such that customers can now use Kodak services to print in any of the three most common ways: online, at one-stop-shopping machines at retail stores, or at home.”What we want to do is give people who want to print at home a choice,” she said in interview with Reuters. “We believe that this is a profitable business model for Kodak and that for a consumer, it is freeing the way they can print at home.”Analysts, who had been told since late 2003 to look for an inkjet strategy from the Rochester, N.Y.-based company, are already skeptical about how Kodak will be able to compete with companies that have millions of printers sitting alongside personal computers owned by families and small businesses.”We remain concerned that the up-front costs of establishing an installed base will be high, and that the mature and competitive nature of consumer inkjet requires considerable research and development, and (operating cost) commitments,” analyst Shannon Cross of Cross Research said in a client note published in anticipation of the inkjet launch.
Kodak EasyShare All-In-One printers will be sold at Best Buy stores beginning in March and on Kodak’s Web site beginning in April.
The All-In-One line consists of three models, all of which have printing, scanning and copying capabilities. The 5100 model ($149.99) is the most basic, with the ability to print 32 pages per minute in black and white or 22 in color, and it can connect to PictBridge-compatible digital cameras for photo printing.The second model, the 5300 ($199.99), adds a 3-inch color LCD display for photo viewing and cropping, as well as several memory card slots to better enable photo printing without needing to use a PC. The highest-level All-In-One, the 5500 ($299.99), is geared toward the home office “prosumer” market with a built-in fax machine, an automatic document feeder and a duplexer attachment.