HP: Rival Printers Mean No More HPs Through Dell

blamanj writes: "Dell Computer seems to have pissed off HP, with their intent to sell their own printers. HP will apparently stop supplying printers to Dell, even though the new Dell products are not yet shipping."

bad decision

[Auckerman]

In a truely competitive market, a company gets nowhere by not selling their product to someone else. If I were an HP stock holder, I'd be pissed.

PC Competition

[EvilBudMan]

That is because with HP's purchase of Compaq, they are in direct competition with Dell with the PC. Now I wonder who will be next. HP is just shooting itslef on this one. Do they really want Dell to get pissed at them and start making inkjet printers with cheaper ink?

Re:Why would Dell want to sell their own printers?

[Enry]

This forces you to keep a stock of ink on hand in case you run out. So odds are you'll have at least one extra ink cartridge when you decide to toss the old printer in favor of a new one. Guess what? You've just bought something you're not going to use!

It's the same idea as debit cards (not the ones linked to your bank account, but like "Disney Dollars" or "D&B cards"). Odds are that you will never extingush the amount on those cards, and just get rid of it while it still has some "value" to it. After 60 days or whatever of non-use, the card expires, and the company gets that value. It's not much, but over thousands of customers, it adds up nicely. (Yes, you can replenish some of these cards, but the idea is still the same).

Re:Smart Move...YEP, Capitialism Classic

[darkPHi3er]

"Chances are HP isn't losing much of anything (if at all) by selling to another distributor.

It's (potentially) better than that (for printer buyers and users)..

1. Dell detects that HP/Canon/Epson are keeping margins artificially high on printers. Dell does a gut check to see if they can undercut the BigBoyz in the marketplace. Dell decides they can.

2. HP sees a new competitor with money, knowledge and resources in the PC arena, decides that rather than allow Dell to transition smoothly to offering their Dell-branded printers, "We can offer you a Dell brand printer 25% cheaper than the comparable HP and give you free extended support.", HP decides to deprive Dell of some printer customers.

3. Dell now has to scramble to get their printers to market, maybe they make some "entry mistakes" maybe they don't (i'd bet don't), regardless, now Dell has to explain WHY they can't offer the customer (most esp CORPORATE buyers who have been told EXACTLY what model HP printer to buy) the world's best-selling printers.

4. HP now goes DIRECTLY to the big Dell corporate accoutants and attempts to undercut Dell's nascent printer biz, the most common technique will be reduced prices.

5. Dell responds with further price drops across their new printer line to gain and retain sales.

Should it actually work that way, that just the "Capitialism Classic" approach to business.

The Egyptians did it 4000 years ago.

About bloody time

[the bluebrain]

This would be an interesting story purely from a business perspective, but the fact that it's about printers gives it a different spin.

Printer profits also depend on sales of ink, since the printers themselves are often sold at a loss [...]

The lack of true competition specifically in the inkjet / bubblejet market is sickening - there is hardly any other market where producers can get away with the shameless margins seen here. Basically you're paying $50 for a $5 piece of hobbled (i.e., you can't refil it) equipment, over and over again. I would prefer to pay a market price for a printer, if I got to pay a fair price for the cartridges later on. Hopefully a additional big player will even things out a bit.

Good riddance to HP

[AllieA]

HP's printers may be okay (though definitely not the industry's best), but their customer service and many of their products (especially peripherals like CD burners) are so horrendously bad, that my company has also banned all HP products. And by the recent acquisition, we have also cancelled our Compaq contracts as well and are in the process of looking for replacements for our Compaq PC's.

I also had the experience of spending probably a month (plus lots of my own money on their non-toll-free support line) trying to get a CD burner of theirs to work (this was a few years ago) and eventually I was told that they couldn't guarantee it would be compatable with my system since my system was self-built! Huh? I was so mad I literally cracked the phone when I slammed it down. Fortunately Best Buy let me return the product past the 15 day return limit (though only for credit) because the person I spoke to said that they have seen this type of thing with HP peripherals before, too many times to count.

Keep up the good work, HP. Would the last one at HP please turn off the light.