Photo giant Kodak burst onto the home printing scene in 2007 vowing to shake up the industry by selling ink at half the price of its competitors.
But while the company has succeeded in doubling its tiny market share year to year — to 2 percent in 2009 — industry heavyweights Hewlett-Packard, Epson and Canon have yet to respond with major ink price cuts, nor are they expected to, says Andy Lippman, a senior analyst at Lyra Research.
“It’s a testament to the business model,” he says. “You sell the printer at a loss and make it up on ink sales. If HP was to match Kodak’s pricing, it would be monumental, and you’d see an immediate impact on its profit margins.”
The recession has taken its toll on sales of ink-jet printers, which are down 12 percent this year, Lippman says, but ink sales have fallen only 6 percent.
“Consumers say they care about the high cost of ink, but when they go to the store to buy a new printer, they shop for price,” Lippman adds. “They’ve heard the messaging from Kodak, but it hasn’t resonated.”
Kodak, which launched its printer line with an aggressive series of infomercials on pricing, is pushing back with an even feistier $30 million “Print and Prosper” TV and Web campaign.
Its Web site, for instance, tells consumers they would have saved $110 in printing costs had they switched to Kodak. It also offers a price chart that promises to tell how much folks overspent with their various printer models from Epson, HP, Canon, Lexmark and Brother.
The calculations are based on a basic formula, of, for instance, eight black-and-white documents, six color documents and a 4-by-6 photo printed in a specific time period. Kodak generally charges more than competitors do for printers.
No. 1 HP says the ink-savings claims are…