Free Lyra Webcast Re: Low cost OEM ink?

[Pistos]

This should prove interesting - someone make us aware of this yesterday on the comp.periphs.printers newsgroup - I've registered for the webcast.


Breaking the Model: Will Chinese Consumers Force Printer OEMs to Give Up Their Razors and Blades?
Jan 16 2007 @ 2:00 PM ET / 11:00 AM PT

Register here.
http://www.webcastgroup.com/client/start.asp?wid=0660116073085

For more than a decade, the printer industry has counted on a lucrative combination of low-cost hardware that draws in buyers and high-priced supplies that deliver some of the best margins of any business. But now printer manufacturers are running head-on into cost-conscious Chinese consumers who just say no to expensive cartridges.
HP has responded with its Simple Black cartridge line, which delivers inferior print quality for a lower price. But now Epson, has gone one big step further, and made low-cost cartridges the centerpiece of its Chinese consumer printer marketing strategy. If this strategy sells printers, competitors will have no choice but to respond in kind, and not just in China. The industry could be facing something it has quietly dreaded for years: a consumables pricing nuclear war that melts the razor-and-blades model and incinerates the industrys rich profit margins.
Join Lyras Charles LeCompte, president, and Jiqiang Rong, director of primary research, for a free Webcast on Tuesday, January 16 at 2 p.m. eastern standard time. Find out the impact Epsons strategy could have on the rest of the imaging industry. From OEM to aftermarket, this live Webcast is an event you must attend.

 

[mikling]

If you look carefully at HP's ploy and I suspect Epson as well you'll probably find that yes, the cartridges do not cost as much as before but look carefully at what the usable capacity is. You'll be shocked. If anything, it has become more lucrative for them. Look at what the 92, 93 costs. Look at how much a 94,95 costs in comparison. Compare how much ink is in there as compared to a similar with a higher capacity. Don't let the exterior size fool you. HP has put smaller sponges in there and the new sponges don't have the same quality as before. You get 1/3 rd of the ink capacity but pay 30% less. ( Read that carefully. On a per CC basis they just doubled the cost!!!!!!) The consumer looks at the cost of the ink cartridge and looks at the packaging and then feels HP has lowered the price of inks. Great they say. These new cartridges are so much cheaper. RIGHT! They don't realize that they are paying double what it cost before.

Now what they have done is put the squeeze on the retail refillers. How come? the price of the new cartridge makes the refiller business tougher because for a few bucks more than a refill a consumer can get a new cartridge. So many do just that and bypass the refill now. In the end though this game has a loser and what it is that the consumer pays a very high price per page.