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Article

Title: Kodak's Strategy for First Printer--Cheaper Cartridges

Author: Bulkeley, William M Article Type: Product Analysis
Source: Wall Street Journal, v249 n30 pB1(2) Publication Date: Feb 6, 2007
  ISSN: 0193-2241
  Illustrations: Graphs, Charts
URL of Publication: http://www.wsj.com

Eastman Kodak recently released its eagerly awaited inkjet printer, which has ink cartridges priced far lower than those of competitors. Such printer makers as Hewlett-Packard (HP) are accustomed to selling printer hardware for little or no profit, but do pull in revenues from ink, which costs more per ounce than perfume or caviar. Overall, annual sales of inkjet printers and multifunction devices globally account for less than a quarter of annual sales of consumable ink and paper. Kodak will turn that model around by making more money from hardware and accepting lower profits from the ink. Kodak will use a combination of new technology and alternative pricing to reduce the cost of ink by about 50 percent per page. The new inkjet-based multifunction devices from Kodak will print, scan, and copy documents, web pages, and photos. The printers are mostly for consumers, with pricing varying according to inclusion of color displays and slots for camera memory cards. The prices are higher than comparable multifunction devices available presently. The traditional money-from-ink model is called the razor and blade model, but Charles LeCompte, present of Lyra Research, says This will be the year the razor-and-blade model breaks because the low-price-ink strategy will have enough impact to cause responses from other companies.

Special Features: Graphs, Charts

Companies:
Eastman Kodak Co

Products:
Inkjet Printers

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