Sunday, June 17, 2007

HP comes in with a new idea!



To me, the market of imaging supplies looks more like a battle field than a competitive market. Large vendors do their best to push smaller competitors off the market and enjoy the fruits on their own only. A fresh example comes from HP. HP turned to be one of the most creative “military man” in this unannounced “war”. While the other vendors make up lots of “horror” stories of how end users’ printers get damaged and fall out of function because of remanufactured or recycled cartridges, stop warranties and refuse any maintenance if the use of an alien supply is suspected to have caused the problem, HP comes up with an absolutely new approach to the problem, especially in the markets, where it is more difficult to bring “infringers” to court.

From May 2007 HP starts selling SIMPLE cartridges for text printing (recommended only for text prints – b/w printing) in CIS and Russia. The idea for this move is as SIMPLE as the cartridge is. HP hopes to grab a large part of the market of the supplies used in old HP printers. In CIS and Russia HP inkjets sold in 2002-2003 are still in use and their users prefer refilling empty cartridges at small refill shops or companies, which is around 50-60% cheaper than buying a brand-new HP ink cartridge.

Still, if compared to the laser segment, the inkjet segment is not that large. But why lose this small tidbit? This is probably how they motivated the release of the SIMPLE cartridge. The SIMPLE cartridge is recommended for text prints only. Thus, the cartridge is black and its price is just 10-15% more expensive than similar compatible cartridges from China (retail price in Russia).

Until now, HP announced it would sell only two models of such simple cartridges:
These are:

>> cartridge HP27b to be used in HP Deskjet 3320 / 3325 / 3420 / 3425 / 3520 / 3535 / 3550 / 3645 / 3650 / 3745 / 3845, Officejet 4215 / 4219 / 4255 / 4355, PSC 1215 / 1315;

>> cartridge HP56b for HP Deskjet 450c / 51xx / 56xx / 5550series / 5850 / 96xx, Officejet 4105 / 4110 / 4215 / 4219 / 4255 / 5505 / 5510 / 5515 / 5550series / 6110, PSC 1110 / 1210 / 1215 / 1315 / 1340 / 1350 / 1355 / 21xx / 22xx / 2410 / 2510, PhotoSmart 7150.

The compatibility lists shows the two cartridges cover the great majority of old HP inkjets.
To me, this move is extremely successful. I regret to tell this, but with this product and good marketing campaign, refilling shops may lose a rather big share of the market for these models since the price of a new “simple” cartridge will not be much higher than an aftermarket product.

At the same time, I would not suggest we should cross all the entries for HP inkjets in our price and products lists. Because of the expenses HP has, the price of a simple black cartridge will be maximally by 40% cheaper, which leaves enough space for refillers to have their prices lower. On a price-driven market like Eastern Europe is, this fact is of utmost importance.

And I also hope HP will find a way to inform end users that there are now two similar cartridges at two different prices and the packaging will be different for the end user not to be handed a cheaper cartridge at the price of the more expensive one!