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 user 2007-05-31 at 11:56:00 am Views: 79
  • #18191

    HP’s Web Plan
    companies like Google, Yahoo! and Amazon have spent years trying to get
    offline information onto the Internet. Hewlett-Packard is running as
    fast as it can in the opposite direction.”They’re all turning atoms
    into bits, while we’re turning bits into atoms,” says Vyomesh Joshi,
    who runs the Imaging and Printing Group at Hewlett-Packard. Joshi wants
    to convince more Web users to print more pages while they surf – and of
    course, make sure as many of those pages as possible slide out of HP
    printers and soak up HP ink.
    Joshi’s plan, in a nutshell, is to make
    printing from the Web easier than it already is.In the meantime,
    business is doing just fine: In HP’s second quarter ended April 30, his
    unit’s revenues grew 6%, to $7.2 billion, and accounted for nearly 30%
    of the company’s total quarterly revenue.But while HP chases down
    printed pages, it must also beat back competitor Eastman Kodak, which
    announced its intentions in February to enter the inkjet printer
    business. Kodak is 20 years late to that business, and intends to shake
    it up with printer cartridges priced much cheaper than those from HP,
    Epson or Lexmark. HP responded with a new ink pricing scheme of its own
    in May.Joshi spoke with Forbes.com about his “Print 2.0″ strategy for
    getting people to print more pages and holding off Kodak.

    You think people are currently hesitant to click “print” from Web
    sites. Why is that, and what are you going to do about it?Joshi:
    Internet printing is not a great experience – the top of the page or
    the bottom of the page gets cut off. You can’t even print from a lot of
    places on the Internet, like Second Life. We purchased a company called
    Tabblo, and are turning their great design software into a toolkit that
    developers can use to integrate into their sites. Mapping sites and
    blogging sites can easily import this print widget that adds a print
    button. Our toolkit does the print formatting.This is going to be very
    important for us because there are millions of blogs created every day.
    What we’re offering with this software is enabling printing. Our
    business is still ink and toner.Which of your businesses is growing
    faster: home printing, or retail printing from Snapfish and other
    sites?While home printing is continuing to grow, Snapfish is growing
    faster. So, 50% of prints are still printed at home, but we’re not
    trying to sell you another printer for your second printer. How many
    printers can you really buy?But you’re still going to print more
    prints, so we want to give you ways to mash up your content with
    professional content. We worked with Dreamworks so you can make mugs
    and calendars with your pictures mixed with Shrek pictures.We’re doing
    this with moving images, too. We introduced a video content site for
    Wal-Mart. Soon you’ll be able to buy any DVD that’s available from
    their download store, and we’ll burn it for you and ship it. We’re
    building a factory for this right now.How are you going to get
    publishers of professional content – like books and magazines – to
    switch over to your pricey digital printers?Books, newspapers,
    magazines and even marketing brochures are all printed on analog
    Heidelberg presses. We’d love to bring that printed material to HP, but
    first we need to bring down the break-even point, so its affordable,
    and improve the speed. A 2,000-page job on a digital press costs the
    same as the analog press now, but if we can move that point to the
    5,000 page jobs, we can capture a lot more business. The benefits to
    digital are clear – you can customize pages, change things, and get a
    lot more flexibility.

    Kodak announced a new ink strategy in
    February, and you followed in May. They offered really cheap ink, while
    you’re going to sell two types of cartridges. Was your move in response
    to theirs?Our new ink strategy roll-out is going very well because
    we’re giving consumers a choice about what type of cartridge to select.
    If we want them to print lots of pages, we have to make it easy.Kodak’s
    approach is a little bit different. They’re letting you get slightly
    cheaper photos out of your printer. But if you look at what they are
    doing with black and white printing, it gets a bit more expensive than
    HP.They’re going after the same exact customers as us. They’re saying
    they’re cheaper but they’re not telling the whole story, from a cost of
    operations point of view. They’re focusing on draft quality and photos,
    but black and white printing is 70% of all home printing.