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 user 2010-01-04 at 11:24:40 am Views: 61
  • #23343

    Eastman Kodak, Hewlett-Packard Heat Up Words, Printer Pricing
    Don’t expect the folks at Eastman Kodak Co. (EK) and
    Hewlett-Packard Co. (HPQ) to exchange season’s greetings this year.A war
    of words is heating up between the two companies over Kodak’s claims
    its printers can dramatically cut printing costs. And the winner may end
    up being consumers.Kodak Chief Marketing Officer Jeffrey Hayzlett
    recently exchanged swipes on microblogging site Twitter with Angela
    LoSasso, the head of social media strategy for H-P’s imaging and
    printing group. At one point, LoSasso published links criticizing
    Kodak’s marketing claims and the reliability of its printers. Hayzlett
    on Dec. 3 responded with “Shame on your tactics Big Ink.”

    later wrote, “You have a fight you can’t possibly win. I am HP.”
    addition to talking smack, the two companies are also cutting prices,
    translating into steeper savings for consumers this holiday season. The
    latest: Best Buy Co.’s (BBY) web site Monday lists three Kodak
    multi-function printers at discounts ranging from 25% to 40% off, and
    H-P’s printers are discounted by as much as 30%.H-P on Friday offered a
    $50 trade-in credit on its printers as it encouraged a Kodak printer
    owner on Twitter to get “Cash for that clunker.” Kodak is also offering a
    $50 trade-in credit at Best Buy.

    Indeed, printer prices remain
    an exception among consumer electronics this holiday season. Electronic
    gadgets generally are being less discounted than last year because of
    better retailer control over inventories. Yet printer prices have
    tumbled.”Since October, the prices of multi-function printers in general
    have dropped about 30%,” said Vipin Jain, chief executive of Retrevo,
    an electronics shopping and review site. “For printers, there’s deeper
    discounting than for last year.”

    Adding to the price pressure is
    H-P, which is trying to address several consecutive quarters of weak
    printer unit shipments and market share loss. Executives told investors
    in November that H-P will increase its printer shipments by at least 10%
    in Jan. 31-ended quarter. The printer division is “getting on the
    attack,” Chief Executive Mark Hurd said at the time.Analysts then
    suggested H-P would win share with dramatic price cuts, which would
    lower overall printer prices.

    There are signs the expected price
    war has emerged.
    Jain said the printer category ranks third – behind
    the popular holiday categories of laptop computers and flat-screen
    televisions – for the most promotions being offered among electronics.

    skirmishes also appear likely to continue.
    On Thursday, Kodak said
    it would modify some ads following a probe by the Federal Trade
    Commission that was triggered by H-P complaints over Kodak’s assertion
    that consumers can save on average $110 per year on ink with Kodak’s
    All-in-One inkjet printers. Kodak agreed to clarify that its annual
    savings estimate is based on printing four pages a day, saying the FTC
    guidance helps make Kodak’s claims “even clearer and more relevant for

    But H-P, in an email statement to Dow Jones
    Newswires, said the ruling “validates our contention that Kodak’s
    advertising was misleading consumers.”

    H-P, the largest U.S.
    printer maker, emphasizes its “track record of quality and reliability,”
    and says its Twitter postings reflect “overwhelming dissatisfaction
    from customers who purchased Kodak printers and discovered the printer
    they bought just isn’t reliable.”

    In an interview Friday,
    Hayzlett defended Kodak printers’ reliability and said the company will
    stick to its value-focused marketing message, despite H-P’s resistance
    to doing so.The iconic camera maker, which is struggling in several
    other divisions, introduced its inkjet printer in 2007 with a different
    approach to the industry’s usual model of selling hardware at slim
    profits and profiting on sales of ink refills.

    Hayzlett said
    Kodak is on track to double inkjet printer sales to 2 million units in
    2009 and expects “some similar growth in this area” next year.”(H-P) is
    the 800-pound gorilla, and they’re using big, heavy guerilla tactics in
    order to come after a small player in the market,” Hayzlett said.Shares
    of H-P recently traded up 0.9% at $51.98 and have gained 43.3% so far
    this year.Kodak shares, which have fallen 33.9% year to date, recently
    were up 5.6% at $4.35.