HP's crown jewel - the printer business

In the Southwest line the other day, I noticed the “print at home” boarding passes on A4 paper exceeded the Southwest card stock passes. Sign of the times – we love the convenience of home banking, travel management and we print a lot of statements and boarding passes at home. HP loves it too. Its printer business is a star. But here’s the catch - the cost of a decentralized or home printed page is many times what it costs a Southwest or Amex with their purchasing scale and production equipment.

As the WSJ puts its “Computer users world-wide spend $22 billion a year on ink cartridges. The price of ink per milliliter from the big printer shops such as Hewlett-Packard Co. and Lexmark International Inc. has been steadily rising, at about 1% a year, according to research from Lyra Research. At the same time, the big companies are getting stingier with the amount of ink they are putting into each cartridge. For example, when H-P eliminated one cartridge that had 42 milliliters of ink and cost $29.99, it replaced it with another that costs $19.99 but has only 19 milliliters of ink”.

HP’s Joshi has this view:

“Small and medium businesses want to focus on their own business. They don't want to focus on their printer”.

Interesting how every tech vendor sells its stuff as strategic, but when it comes to cost comparisons, always paints it as trivial and non-strategic. Also, it does not just affect small businesses. Many large companies (my CIO customer base) have mobile and at home work forces who use smaller printers. So the search for cheaper options will intensify.

Remanufactured cartridges are a growing option, like third party maintenance for software.

And then there are other choices. I recently switched to an older model $ 99 black and white laser printer with a 6,000 page yield cartridge (at roughly the same cost as the separate HP Inkjet color and black and white inkjet cartridges were costing me to yield 400 pages).

I have also found a hidden jewel in the Microsoft Office suite – the Microsoft Office Document Imaging feature – my hard drive is where a lot of my “printing” goes – now if the TSA security at the airport would only accept an electronic boarding pass…