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 user 2010-11-10 at 8:08:31 am Views: 60
  • #24290


    plans to stop supplying printers, cameras and scanners to Dell
    Computer, citing that company’s intention to enter the printer business.

    spokeswoman Diane Roncal told CNET News.com that the company notified
    Dell of its plans on Tuesday morning.”The basis for the relationship is
    no longer valid, given the company’s intent to sell Dell-branded
    printers,” Roncal said.Roncal said Dell’s business represented an
    “insignificant” portion of HP’s total printing and imaging business,
    equal to only a few days’ sales per year. Roncal said the company is in
    discussions with other resellers to pick up the sales.Dell currently
    offers HP’s printers, scanners and digital cameras as well as its
    Jornada handhelds for sale on the Dell Web site. It has been widely
    speculated that Dell is planning to enter the printer business, although
    the company has not laid out its plans.

    Dell spokesman Mike Maher said the company was surprised by HP’s move.
    befuddled that the mere possibility of us entering the printer business
    would make them so nervous,” Maher said. “It seems counterintuitive
    that in this market you would want to make it harder for customers to
    get your products.”The move will have no material impact on Dell’s
    finances, Maher said. The PC maker, he said, has direct relationships
    with Xerox, Lexmark, Canon and Brother, and if customers want HP
    printers, Dell will continue to offer them by purchasing them through
    the distribution channel.

    Dell is still evaluating its options as
    far as its own brand of printers is concerned, Maher said. Dell
    President Kevin Rollins told the Austin American-Statesman last week
    that the company is likely to be in the market by the end of the
    year.”My guess is sometime soon, you’ll see us in the printer
    business…with a Dell-branded printer. Probably by the end of the year,
    you’ll see something,” Rollins said.HP, the world’s largest printer
    maker, and Dell, now the No. 2 PC maker behind HP, once enjoyed a fairly
    close relationship when it came to printers. Dell was one of HP’s
    largest sales outlets, according to sources. HP resellers often
    expressed dismay over the relationship because assisting Dell, they
    said, potentially cut into their own business.Since the HP-Compaq merger
    was announced, however, Dell has increasingly begun to buy printers
    from Lexmark and other HP competitors. In a similar fashion, after
    Compaq bought Digital in 1998, Dell replaced Digital as its field
    service provider.Dell began selling HP products in 1998.

    Both PC makers lose
    say that the relationship between the two companies, while contentious
    at times, had offered benefits to both.”Both companies are going to
    suffer from this,” said Gary Peterson, director of research for market
    researcher ARS. “Dell, like it or not, is a pretty big reseller of HP
    products. HP is going to miss that.”At the same time, Peterson said, HP
    has been a significant supplier to Dell and noted that it owes a
    fraction of its PC sales to the fact that it has been able to bundle HP
    printers.”Dell is going to be missing HP a great deal,” he said.It’s too
    early to predict how Dell would fare with its printers, said Bear
    Stearns analyst Andy Neff.”This is still a war on paper only at this
    point–Dell does not have printers yet (and it) needs to detail its
    plans and execute those plans,” Neff said in a note to clients.

    Lynch analyst Steven Milunovich estimated that HP printers sold through
    Dell represent approximately 3 percent of HP’s $9 billion in imaging
    hardware sales, but said that other partners could quickly make up for
    that $300 million in lost sales.

    Lucrative ink sales are Dell’s
    key motivation for entering the printer market, but Milunovich
    questioned whether Dell would be able to persuade consumers to buy
    printer cartridges by phone or over the Internet.”The vast majority of
    supplies are bought through retail, not over the Web,” Milunovich
    said.However, Neff said that it may be premature to count Dell out.”As
    to the conventional thinking that ‘no one will buy ink cartridges
    direct,’ one could have said the same about PCs 10 years ago,” Neff

    Lexmark is likely on the short list of companies with which
    Dell might partner, a list that could also include Xerox, Epson and
    Canon, Neff said. “Dell will push for favorable economic terms from a
    vendor and may choose more than one vendor (i.e., one for laser, one for
    inkjet).”Peterson said he expects Dell to offer both inkjet and laser
    printers under its own brand, and to aim largely for low-end models that
    it can bundle with its PCs.”They are going to have a minimal impact on
    the market,” Peterson said. “What people don’t understand is that HP is
    the Microsoft of the printer world. To think that Dell is going to get
    even 10 percent of the market is preposterous.”