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HP

HP: Rival Printers Mean No More HPs Through Dell 364

Posted by timothy from the aren't-we-all-in-the-same-gang dept.
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."
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HP: Rival Printers Mean No More HPs Through Dell More

HP: Rival Printers Mean No More HPs Through Dell

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  • Dell talks to HP (Score:5, Funny)

    by Master Commadachi ( 588004 ) on Wednesday July 24, 2002 @11:30AM (#3944618)
    Dude, yer goin' to hell!

  • bad decision (Score:5, Interesting)

    by Auckerman ( 223266 ) on Wednesday July 24, 2002 @11:30AM (#3944621)
    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.

    • Re:bad decision (Score:5, Insightful)

      by Sc00ter ( 99550 ) on Wednesday July 24, 2002 @11:33AM (#3944655) Homepage
      Well look at it this way.. HP Printers sell thru dell because they're part of a package deal. To buy just the printer alone from Dell is usually more expensive.

      If Dell is selling their own printers, they're going to package their printers with their systems, not HPs. So since Dell selling them standalone isn't really worth it to HP, and they're not going to be part of the package deal, they're probably not going to sell many, if any, thru Dell. So what's the point?

    • Re:bad decision (Score:4, Insightful)

      by Telecommando ( 513768 ) on Wednesday July 24, 2002 @11:35AM (#3944673)
      It's probably not as simple as that. HP probably sells printers to Dell at a discount while selling them at full price elsewhere. Now that Dell is going to compete with them in the printer market, why would HP want to give them that discount only to have Dell undercut them on their own printers in the retail market?

      • Re:bad decision (Score:2, Insightful)

        by glrotate ( 300695 )
        why would HP want to give them that discount only to have Dell undercut them on their own printers in the retail market?

        You're assuming that if one can't buy the HP from dell that one will buy a HP retail.

        I don't think you can assume this. A portion of customers buying HP from dell do so because of convenience. It's simply easier to buy a printer with your order of PC's. By eliminating the option to buy a HP, they may buy a Dell or an Epson. You can't assume they were determined to buy an HP.
        • I'm not assuming anything, it's just that deals like this are common in business. HP sells printers to Dell at a discount in return for Dell offering them exclusively with their systems. Dell gets cheaper printers ("WE offer HP printers for the price of an Epson when you buy a complete system!") , HP gets new suckers ^H^H^H^H^H^H^H customers to sell ink to; everybody wins. (Except the consumer, but he doesn't count anyway. "Just give us the money and no one gets hurt.")

          I can't say for sure this is what was going on but it's not out of the ordinary.

          Now if Dell has their own printers, which they (probably) make a greater profit on, which one do you think will be pushed harder by the Dell sales people? Yup. Dell. So HP's pretty much cut out of Dell's market anyway. Why help Dell if they're going to cut you off anyway?

          I'll grant you, HP is probably just being vindictive and spiteful by this action, but that's not unusual in business either. Nor is it necessarily bad for the company. Only time will tell. If Dell sells really crappy printers it may increase HP's sales as older Dell users tell the newbies, "DUDE! You shoulda got an HP!" ;-)

          In the end you're right, it will be the consumer who decides what printer he wants. The totally uninformed will probably just buy a package deal and won't care about what brand of printer is shipped with it as long as it works. Kinda like they do with monitors, it may say DELL on the outside but what's inside? Hitachi? Sony? NoNameCo? Few people care as long as it looks good and works. I'm currently staring at a monitor marked "Hewlett Packard" but I know that they didn't make it. Who did? Who cares? Monitors have become a commodity item, interchangable and easily replaced. Printers should be as well, but it may take a few more years for this to happen and the printer manufacturers are fighting it hard as they try to hold on to the profitable ink market.

          Wouldn't it be nice if you could just go buy a printer, any printer, and some bottles of ink, any ink, fill up the ink resevoirs and start printing? Kinda like we do now with floppy disks, paper, blank cds and other computer consumables. Proprietary products suck.

    • Re:bad decision (Score:3, Informative)

      by Cheeko ( 165493 )
      According to this article [cnn.com] from CNN, Dell's printer sales only account for 2 days worth of all of HP's printer sales for a year. So this isn't a major loss. Add to that, the fact that Dell will likely still by HP printers for some of its customer, just not directly from HP, and HP could potentially make MORE money off of Dell, depending on demand for the HP printers from Dell customers.

    • Re:bad decision (Score:2, Insightful)

      by Anonymous Coward
      And what qualifies you to make such a broad proclamation about the business world?

      Did you once work at a hamburger stand? Maybe you can program in C++ AND Perl?

      I consulted for a company once that wanted to just sell a bunch of their products, we'll call the widgets. They were selling widgets everywhere. In order to get some places to take them, we'll say Wal-Mart, they had to offer considerable discounts. Their smaller buyers got pissed off because Wal-Mart could sell widgets at a lower price, so they bought someone else's widgets. Wal-Mart, now being almost the only customer, had more leverage to force more discounts.

      Essentially, the widget manufacturing company screwed themselves by getting themselves in bed with someone who didn't really fit with their makret. Given the reality that these things happen often, and in thousands of different variations, and your 'truly competitve market' exists only in your head, you can shove your advice up your ass.
    • With the merger a done deal, HP is reorganizing their divisions, setting new strategies. They probably want to compete more fully with Dell head-to-head in the e-commerce space, and they can't do that if Dell is selling their products.

      HP has an established brand of printers, well known, well liked. Dell's printer division is going to have to spend big bucks to get there. Better for HP to yank their printers now and use it as a competitive advantage to sell their own systems, and let Dell fumble around.
    • NOT in a 'truly competitive market', but in a market with perfect competition, with commodity products. Printers are NOT a commodity product; brand preference plays an enormous part in this marketplace. Having worked in the industry, I can tell you that HP's brand carries incredible buyer preference. Did you know that CANON commercialized laser printer technology, and to this day manufactures the engine in every HP LaserJet sold? However, despite several attempts to launch their own line of standalone printers, they have never been successful. They've been locked out of the marketplace not by technology, but by insufficient brand presence.
    • Who said we have a truly competitive market? The reality is precisely the opposite -- the market is full of intreague and backstabbing. This is why business and marketing types do this stuff, and us techoes don't.
  • I hate this sort of thing. Corporations refusing to sell their products as an anti-competitive tactic. It's a textbook microsoft move.

    I'm wondering, how common is this outside of the computer industry?
    • I agree. I want to be able to buy a Toyota at my local Ford dealer, dammit!

      In other words, it's extremely common outside of the computer industry.

    • In order for this to be anti-competitive, HP would have to have a monopoly on printers. It's no more anti-competitive than if they decided not to have Radio Shack carry their products. There are so many other printer manufacturers out there that HP will probably only hurt itself. Given the choice of selling a thousand units to Dell for $50 less than you sell them elsewhere, but still making money on them, versus not selling that thousand units at all, I know which *I* would choose.
    • Corporations refusing to sell their products as an anti-competitive tactic. It's a textbook microsoft move.

      I'm assuming by "Microsoft move" you mean monopolistic move. If HP tells ALL computer retailers "we won't sell you our printers to sell if you have dell printers", then, sure, its a monopolistic move.

      However, Dell, (getting the HP printers at an extreme discount, due to a package deal and partnership) is trying to make a higher profit by taking advantage of a business partnership. If your partner tried to swindel you will you say, "Welp, ya got me! I don't want to act anti-competitive", or will you say, "Screw you, hippy! If you try that crap, I'm out!"??

  • Smart Move. (Score:4, Insightful)

    by AtariDatacenter ( 31657 ) on Wednesday July 24, 2002 @11:31AM (#3944628)
    You're only giving a long-term leg-up to your competition by allowing them to smoothly and easily transition to their own product line by continuing to sell them yours. You're giving up a short-term gain for a bit of long-term hurt. Exactly what I would have done.

    This whole 'coopetition' thing is just like Microsoft tries to get competitors to do. "Let us use your product and embrace it until we're ready to demolish it."
    • You're only giving a long-term leg-up to your competition by allowing them to smoothly and easily transition to their own product line by continuing to sell them yours. You're giving up a short-term gain for a bit of long-term hurt. Exactly what I would have done.

      Except that now Dell is going to continue selling HP printers obtained through distributors instead of HP directly. It seems to me that HP is missing out on the chance to make a little more money out of the deal (depending on what prices they sell at vs distributors cost).
      • But Dell loses its status as a partner or direct distributor. (Which affects things such as support and back-line engineering contacts, and sweet-deal contracts.) Chances are HP isn't losing much of anything (if at all) by selling to another distributor.
        • "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.


          • Good summation, about the only thing you left out was the implicit threat to other HP customers.

            "Don't think that you're so big we won't drop you like a rock."

            Apparently HP thinks this is enough of a problem to react harshly now at the first signs of trouble to possibly head off bigger trouble down the road.

            =tkk
    • I have no love for HP. They sell their ink cartridges for *way* too much and then put a bunch of anti-ink refilling technologies into their printers so that it is not worth the trouble of trying to refill them yourself.

      If Dell undersells HP on the ink by a large amount, HP is going to be in trouble. And they can do it too. Unlike HP, Dell doesn't need to rely on ink for 1/2 of its profits.

      Brian Ellenberger
    • Wait, I thought we were mad at Microsoft for saying you can't run competing products on their OS? (ie. XDM on XP, GPL code on DRM machines)

      So now we're mad at them for letting us run competing products until they can integrate something of their own then make us switch (demolish it, as you say)?

      HP had a choice here - continue to let Dell offer their printers and keep getting revenue, or stop selling to Dell immediately in order to show their position on Dell offering their own printers.

      Dell is offering the printers either way, HP withdrawing their line only cost them a customer. If HP were confident its printers truly were better it would not fear Dell's customers opting for a Dell printer over theirs.

    • Analysts have said Dell could aim to take a piece of the lucrative market for printer supplies or simply launch a price war in a bid to destabilize the most profitable unit of HP, which became the No. 1 PC seller by buying Compaq in May.

      "Dell is trying to take a shot at HP's core business," said Bear Stearns analyst Andrew Neff.

      Dell is taking a potshot at HPQ -- Dell is already beating compaq...but now that COMPAQ/HP are one, they can try to leverage their dominance in the PC market to reduce HP's profitability in printers.

      Hello, where have we seen the "leverage dominance in one area" .....yeah....microsoft.

      All you trolls blasting HP -- read the freaking article first.

      This is HP's response to dell's effort to become a horizontal monopoly. (Maybe dell's a bit jealous of hpq's computer/printer dominance? ironic considering dell was beating both hp and compaq......)

  • I thought the money was in printer cartridges not the actual printers themselves. Besides, to make money Dell would need to sell their products at retail locations which are already covered pretty well with HPs. They wouldn't be able to make enough money just selling to their own customers.

    • to make money Dell would need to sell their products at retail locations which are already covered pretty well with HPs

      Dell seems to do just fine selling their products online and mail order. If they bundle their own printers instead of HP printers, why would they need to sell them at retail outlets?

      • HP can sell them at a certain price based on the volume they sell. Dell is not 90% of HP's market, HP has their printers at every retail outlet that sells anything computer related. If Dell plans on manufacturing printers simply for bundling they'll need to charge twice as much as an HP printer unless their plan is to lose money per unit.

        Also, the cartridges are the lucritive items and I can't see a large number of people wanting to pay $20 for shipping on top of $35 per cartridge. So it would be even more important for the cartridges for Dells printers to be in retail outlets, but it's almost as important to sell the printers retail too.
  • Even if I was buying a Dell computer, why would I care? What advantage is there to buying a printer from the same place you order your computer from? Has Dell been selling HP printers less than what I could buy from any other mail order outlet? Less than what I could buy the same HP printer from Fry's (or wherever)?
    • > What advantage is there to buying a printer from the same place you order your computer from?
      In a word, convenience. Almost everyone I know who isn't "in" the industry who has bought a computer has bought a printer from the same source. They have a warm fuzzy feeling that since they came from the same source, they'll be compatible. And the vast majority of the computer-buying public isn't "in" the industry.
      When you look at corporate customers, then there's an even bigger tendancy to buying everything from a single source ("preferred supplier"), since it's easier to deal with from an bookkeeping/admin point of view and there's only one place to go when things go wrong. If you buy your computer and printer from the same source, there's nobody else for them to to blame any incompatibility on.

      > Has Dell been selling HP printers less than what I could buy from any other mail order outlet?
      I can't say for sure, but I'd be willing to take a bet that if you buy a computer and printer at the same time from Dell, you'd pay less that if you purchased them seperatly.

      > Less than what I could buy the same HP printer from Fry's (or wherever)?
      I don't know about Frys (I don't know of one I could reach today from here), but I'd be surprised if Dell couldn't beat a retail store for price. Mail order/phone order/internet is inherently less expensive for the vendor than retail, since the overheads are much lower (and the bigger the area you cover, the bigger the saving).

  • PC Competition (Score:3, Interesting)

    by EvilBudMan ( 588716 ) on Wednesday July 24, 2002 @11:33AM (#3944649) Journal
    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:PC Competition (Score:2, Insightful)

      by hajibaba ( 468067 )
      Err... wasn't HP already in direct competition with Dell before they bought Compaq?

  • Proposterous! (Score:5, Funny)

    by L. VeGas ( 580015 ) on Wednesday July 24, 2002 @11:35AM (#3944669) Homepage Journal
    Oh right! Dell's going to make printers. That makes as much sense as HP making computers.

    wait a second....

  • Stupid Management (Score:2, Troll)

    by N8F8 ( 4562 )
    Looks like one bad decision after the next. First that moronic Compaq-HP merger and then this. Horrible to see a great company brought down by stupid mangement [hp.com].

    Carleton S. (Carly) Fiorina [hp.com] is Chairman and Chief Executive Officer of Hewlett-Packard. Click the link to tell her what you think.

    • Looks like one bad decision after the next. First that moronic Compaq-HP merger and then this.

      Makes sense to me.

      Why would Dell want to be dependent on Compaq for its printers?

      Why would Compaq want to assist Dell's sales of computer systems by selling them printers.

      I expect Compaq-HP would have cut Dell off eventually, or ramped up the printer prices to put them at a competitive disadvantage to Compaq's line and sucked out their market share in the PC business. (If nothing else, continuing the relationship would bring up anti-trust issues eventually.)

      So Dell started cutting the apron strings, and Compaq used this as an excuse to do as much damage to them as possible in one hit.
    • Slightly offtopic, from the link in the parent post: Has anyone noticed this or is it just me; HP has a very large amount of women in upper management for a corporate entity. I think its pretty interesting to see a woman as a Chairman and CEO of a company so large. Could This whole problem be because management is just at 'that time of the month'?
      • Carly's "time of the month" has lasted for years then. I can assure you that the venerable Bill Hewlett and David Packard are turning over in their graves right now over what she's done to their company. HP used to be a hallmark of quality, especially in the instrumentation field (which is what they started making in their garage to begin with). I have a much harder time associating the rock-solid HP image with instruments that say "Agilent" on the front (come on, people, that's not even a word!!!). Plus, she shut down the Australian calculator research division, which was the other sector where they were the very top quality supplier. Yes, you can still buy HP calculators, but who knows for how long, and future innovation has been shut down completely. So, basically, HP has castrated itself (pun intended) by slicing off the two most solid and respected sectors of its business and has degenerated into merely a supplier of a mediocre product in a highly competitive and volatile market. I swear it's like Carly Fiorina gave the whole company a sex change (and as burly as she is, and with a name like Carlton, I have to wonder if this is something she has personal experience in). Now, instead of being the supplier of big, bad, solid manly instrumentation, they make cute little computers in pretty cases that you buy for your mother. Now excuse me while I continue hoarding calculators.
  • With the (somewhat) recent prosecution of Microsoft, I read up (somewhat) on Anti-trust laws, and this seems to be text book. "Hewlett-Packard Co. , the No. 1 printer and personal computer maker" stops selling printers to Dell because of a completely unrelated business venture (Dell making printers), in hopes to keep their 'monopoly' on printers. Could someone explain how this isn't antitrust?
    • Could someone explain how this isn't antitrust?
      Probably because even though HP is the leading printer manufacturer, they do not have a monopoly. This is actually more common than an industry forming a monopoly. Monopolies form best when there are significant costs associated with leaving one supplier/manufacturer/company and choosing another.

      I would argue that it would be exceedingly difficult to have a monopoly on a peripheral like printers. There is no barrier to exit given the modular nature of printing in all major (and most minor) OSes. How hard is it to change printers? Install printer. Install driver. Done.

      There are no applications which will cease to work, so there's no need to purchase or install new apps in order to exit from your old printer. The driver install only takes a couple minutes, so the time involved doesn't form a significant barrier to leaving your current printer. Contrast this with changing OS and you'll see why there can easily be a monopoly on an operating system vs. peripherals.
      • I suppose I've always envisioned a monopoly not just technically, but from a consumer standpoint of familiarity. This just strikes me as odd:
        Dell has a division making computers
        Dell has a division making printers

        Because Dell has decided to make printers, the division making computers no longer has the ability to purchase HP printers. But, since HP does not have a monopoly on this commodity hardware, they can discriminate against companies that have divisions that compete with theirs? Sounds legal, but it sounds strange at the same time...
    • HP doesn't have anything remotely resembling a monopoly on printers. Just being No. 1 in a market doesn't make a company a monopoly. I can't find any numbers on the 'net that aren't part of an expensive report, but I can assure you that HP's market share in printers is far less than Microsoft's market share in operating systems.
  • "Dell spokesman Mike Maher said his company would still sell HP branded printers that it purchases through distributors, but expressed dismay at HP's decision. "Frankly we're surprised that a company would make it harder for customers to get their hands on their products," he said. "

    I'm not.

    Since when have these companies really cared about their customers, rather than their egos?

    Sorry to be so cynical, but this is just all too common and pathetic.

    -----rhad

    • As opposed to, say, making money? That is the point of the whole exercise, you know.
      • Oh good grief.

        RANT ON

        People on slashdot seem to fall into two lines of thought:

        1) That all corporations are eveil and hideous unless they are basically so nice and "genuine" that they go out of business.

        2) That all corporations exist to make money regardless of means or methodology

        Worst of all, is that neither side seems to fathom that a combination of the two is the answer. Anyhow, for the purpose of clarification, I am cynical to HP in this case because not making their printer's available to Dell does not help their business OR help the consumer. It, like their merger with compaq, is little more than a desperate attempt by the upper exec's to pad their ego and make it look like their doing something. So, to my responder-person, yes a corporation needs to make money as well as please their customers. Neither of which HP is accomplishing here.

        RANT OFF

        What is truly disheartening is that no one at HP seems to grasp that an ideology of "let's stop selling our products to a group of people, because X distributor is perhaps thinking of producing a competing product." is not good business! Now instead of a possible choice for Dell customer's between HP or Dell printers (I don't know, maybe Dell wouldn't offer them at all?) they are only offered Dell. Well congrats HP. Instead of making a few more sales, you've further demonstrated that your executives don't understand the aformentioned "lesson" of business, that the same executives are egotistical and overpaid (a frightening combination), and that your customer's are again going to feel isolated and confused.

        -----rhad

  • Oh well. (Score:2, Funny)

    by ultima ( 3696 )
    And in other news, Microsoft refuses to sell Windows to Dell as long as they are selling computers with Linux pre-loaded.

    HP, uncreative as always, goodbye!

  • prisoner's dilemma (Score:2, Insightful)

    by Knytefall ( 7348 )
    This seems actually to be a very good prisoner's dilemma-style situation. And in this case, they both chose to screw each other. If you are familiar with prisoner's dilemma, you know that this is the worst possible option.

    I think this is very bizarre... especially since it's really Dell that has the advantage since they possess the customer relationships (the most valuable asset). It seems that it would have been better for HP to hold off a bit and use the time to transition Dell's customers away from HP.
    • I think this is very bizarre... especially since it's really Dell that has the advantage since they possess the customer relationships (the most valuable asset). It seems that it would have been better for HP to hold off a bit and use the time to transition Dell's customers away from HP.

      Except that according to the article, Dell's customer relationships so far only produce "about two days' worth of HP annual printer sales", or about 0.5%.

      And how the heck does helping Dell transition it's customers away from HP's products help HP??

      • 2 days worth of HP printer sales? Thats a hell of a lot of printers.

        I would bet thats at the high end of the scale with the majority of companies being less than a single afternoons worth.

  • HP's stragey (Score:3, Informative)

    by papasui ( 567265 ) on Wednesday July 24, 2002 @11:40AM (#3944720) Homepage
    I know everyone is saying this is a bad move for HP and it very well may be but I think I see what they are doing. If Dell intends to produce their own printers why would they continue to purchase HP priinters in the future when it obviously will end up being far cheaper for them to manufactor and package their own. HP is trying to cut them off before they can do this and hurt them in computer sales when they won't be able to package anymore HP printers while going on with this. One of two things will happen, either Dell will get suckered into a big fat increase on HP printers or they will have to go with another manufactor. Either way its not that bad for HP because they can focus on supplying other vendors, theirselves included or they will get some additional revenue while hurting Dell. Business as usual.

  • Why would Dell want to sell their own printers? (Score:3, Insightful)

    by origin2k ( 302035 ) on Wednesday July 24, 2002 @11:41AM (#3944723)
    The article states that printers are sold at a loss and that most consumers prefer to buy their ink cartridges at local retail stores (the profit maker). Because HP has presence in the retail arena this makes sense. However, Dell must believe that customers are willing to purchase supplies online for Dell branded printers, even knowing that most consumers prefer to do retail.

    I don't know about everyone else, but I don't buy ink cartridges until I need them and when I do I run down to the store and pick one up because they are so freaking expensive. Unless you are monitoring your ink, you can't predict when you will need to order another one online and wait 3-5 days to get it.

    As for HP cutting off sales to Dell? Seems par for the course for a company that hasn't made very many good decisions lately.
    • 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).
      • 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).

        I just got through trying to crack some riddles [berkeley.edu], so my brain is rather toasted, but this situation is not QUITE like the prepay debit cards.. because although Dell gets you to buy something you wouldn't otherwise buy, and therefore makes some profit they wouldn't otherwise make, they actually have to give you the cartridge, so their profits aren't so substantial.

        With the prepay card people, they take your money and don't give you anything unless you *use* the card.. which they assume most people won't do entirely.

        But, I suppose you're right for the end user: it sucks both way, and unless you can purchase something much cheaper through an inconvenient avenue (online in this case), then it doesn't make sense to purchase that way. If you *can* get it cheaper, then if you save $10 on each $40 cartridge, and use 20 cartridges over the life of the printer, but have 2 cartridges left when you heave it into the dumpster, you still saved a boat-load of money... even though you accidentaly allowed the seller to profit unnecessarily on the last two cartridges.

        But anyway, it seems like printer makers always either sell really expensive printers with cheap cartridges, or (more often now) sell extrodinarily cheapo printers and expensive cartridges. (In fact I often see Lexmark, Dell's possible partner in this, seems to be selling their Z-series at incredibly low prices..) That way, I guess they probably get themselves in the market (even at a loss) looking really inexpensive.. but then make a ton of money on cartridges. Can they REALLY cost $40 to make, market, and sell??

  • Nice Spin (Score:3, Informative)

    by IWantMoreSpamPlease ( 571972 ) on Wednesday July 24, 2002 @11:46AM (#3944777) Homepage Journal
    >>Dell spokesman Mike Maher said his company would still sell HP branded printers that it purchases through distributors, but expressed dismay at HP's decision. "Frankly we're surprised that a company would make it harder for customers to get their hands on their products," he said.

    No, it's not harder to get an HP printer, I can go to any of 1000 stores near me and pick one up quite easily, as can any number of new-computer buying people.

    Dell is trying to muscle into HP's area, and this is how HP is responding. I'm not surprised at all...
    • No, it's not harder to get an HP printer, I can go to any of 1000 stores near me and pick one up quite easily, as can any number of new-computer buying people.

      While I agree that this was definately a spin intended to make HP look dumb and Dell look innocent, I do agree that it does make it slightly harder to get an HP printer... especially in this era of mega stores and one-stop-shopping. In the article, HP says Dell only makes up 2 days/year (or 0.5%) of its printer sales... but I wonder what percentage of printers purchased from Dell (the former #1 reseller of PC's) are HP's, and what percentage of purchases from Dell include printers.

      Any ideas?

  • Story Updated (Score:5, Funny)

    by jaymzter ( 452402 ) on Wednesday July 24, 2002 @11:49AM (#3944816) Homepage
    CNN (I lost the direct link) is reporting that the real
    reason HP is pulling printers from Dell is because that
    lovable scamp, the "Dell Guy", reportedly grabbed Carly's
    ass at a recent "goodwill" meeting.

    Carly was overheard to say "He'll never get his hands
    on my toner again!". The Dell Guy responded with "Dude,
    what a rude BITCH!"

    Can someone without an actual job please find this link?

  • Well, they're competing with us. We better stop selling our products!"
  • Ars Technica had a better analysis, with the dude implying that Dell would probably go with Lexmark or Epson printers instead of building your own... The key being to stop giving money to the #1 PC Maker.

  • About bloody time (Score:3, Interesting)

    by the bluebrain ( 443451 ) on Wednesday July 24, 2002 @12:09PM (#3944983)
    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.
  • This older article at CNet [com.com] has a quote from HP saying "Dell's business represented an 'insignificant' portion of HP's total printing and imaging business, equal to only a few days' sales per year." For all of the posts saying HP is shooting itself in the foot, or are making a bad decision, ask yourself, what would you do if one of your partners, who sells your products, decided to make their own version of your product and sell that too? HP is making most of their money in the printing industry elsewhere, so why not drop Dell?
  • HP: Hi, Dell?
    Dell: Yes?
    HP: This is HP. We're tired of receiving revenue from the printers you sell for us.
    Dell: I see.
    HP: We're going to stop selling printers through you.
    Dell: Well have fun.
    • From HP's point of view, it probably went like this:
      Dell: Hi, HP? We've decided to hang you. Could you sell us some some rope? We'll have the gallows done in a little while.
      HP: Not effing likely.(Gathers up toys and goes home)

  • Good riddance to HP (Score:2, Interesting)

    by AllieA ( 170303 )
    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.
  • Dunno why this story made Slashdot, but...
    HP believes consumers prefer to buy ink from retailers rather than online
    Heh, that's an interesting way to look at it. I think it's more like: "When someone needs ink, they need it now." Nobody buys a printer in a hurry, but they do buy ink that way. I recently helped my mom get an ink cartridge (she wanted me to make sure she didn't get the wrong type), and she was willing to get ripped off buying retail, even though she knew (and I reminded her) that she could get better price. Why? She wanted to print something that day. So she paid $30 for a fscking cartridge.

    As for HP's decision, I can think of lots of reasons for HP to do this:

    • Punative. If Dell has a printer supply crunch, it'll cost them money, delay 'em, etc. Dell has low margins and needs flow, so they can be hurt. Might as well make an example of them, especially if it won't cost you anything (HP claims that other resellers have already agreed to contracts to make up for Dell's volume).
    • In the short term, it might cause Dell computer customers to go to a retail store and buy an HP printer, since Dell either won't be able to sell printers for a while, or will have to increase their printer prices.
    • HP says they've already made deals to sell their printers to someone else. Maybe computer buyers will go to those other parties. Dells already have atrocious reputations for quality. (All the ones I've seen this year were junkers that came preloaded with XP: four out of four machines had reliability problems -- whether that was due to XP or Dell, I don't know or care. Yes, they're black. But black cases don't fool me anymore, thanks to Dell. ;-) If I were thinking of buying a Dell (I'm not) and I heard it would come with a Lexmark piece of crap (don't get me started on Lexmark..) instead of an HP, that might push me over.

  • Well, since the cat's out of the bag.... (Score:3, Informative)

    by LazLong ( 757 ) on Wednesday July 24, 2002 @12:37PM (#3945174)
    I have it from a well-placed source in Dell that Lexmark is going to be making the printers that Dell is going to rebrand.

    Since I buy all of my x86 servers from Dell and am familiar with their support structure, as are my desktop people, this may be an attractive alternative to HP if the printers are decent. I personally have little experience with Lexmark, tho they do have some nice looking management tools. With Dell's backing I'd be willing to give them a chance. Dell has always given me excellent support. Such as recently offering to take back the Itanium servers that were bought by a group at work and give a full refund due to Itanium being the huge dud that it was.

    We recently replaced several of our HP 5si's with HP9000's, and boy are they pieces of shit! We've had nothing but problems with them. And they just feel flimsy as hell when you open them up and futz around with their guts. Guess HP's been doing too much corner-cutting. I regret that we got rid of the 5si's as they are solid printers.
    • Well, if you dislike HP's printers, I fear you'll really be sorry if you choose Lexmark.

      I've done a lot of work with both - and my experiences have always been decidedly poor with Lexmark. For inkjets, they consistently have the *worst* printhead technologies. You'll never get "photo quality" printing out of a Lexmark inkjet -- at least, not nearly comparable to a good Epson Stylus Photo series, or a high-end Canon inkjet.

      On the laser printer side, Lexmark lasers print perfectly ok - but their toners always seem to cost $40+ more than the competiton, and they tend to have annoying little parts that break and cost big $'s to replace. (EG. One of our Lexmark Optra lasers quit realzing the lid was closed, so it wouldn't go online anymore. You'd figure it's just a small switch that broke, right? Wrong! Lexmark had this goofy plastic "ice-pick" looking thing on the top of the lid that pokes down deep into the printer, to trip a switch that lets it know the lid is shut. Of course, this thing snapped off. Replacement part cost? Around $60!)

      I do agree that HP Laserjets are "hit and miss" with quality nowdays. You almost have to hand-examine every single new model before you order it, to see if it's a "winner" or a complete "loser". At least, I find you can usually tell in just a few minutes. They either build flimsy-looking stuff or really solid stuff. There's not much in-between with HP. We had good luck with the 8000 series, other than some hassles cleaning it out pretty regularly to avoid strange errors and poor print quality. We tried the 8100 series after that, and again - good quality. Seemed to fix some of our small complaints on the 8000 line, even. Expensive, but you got a big, solid printer for the $'s.

  • Where it went wrong for HP (Score:4, Insightful)

    by joneshenry ( 9497 ) on Wednesday July 24, 2002 @01:20PM (#3945590)
    HP's problems began well before Carly Fiorina. The critical decision was made by 1993 when HP decided that it could not afford to manufacture the next generation of processors, choosing instead to partner with Intel to develop the Itanium processor. What HP refused to admit a decade ago was that in effect it was surrendering the high-end Unix business.

    By telling the world that PA-RISC was going to be phased out, HP killed any chance of growth in the high-end business. No customer with any sense would believe that a transition from PA-RISC to Itanium would not be a monumental upheaval. And if a painful transition was a certainty, why not bite the bullet and go with either Sun or IBM? The decision could not have come at a worse time with the last boom for a while in business computing just about to start.

    With growth flat in what should have been a boom time, HP desperately entered the lower margin consumer PC business in order to generate more cash flow, any kind of cash flow. Unfortunately HP entered the business just as it was about to crash in turn. What was supposed to at least generate some revenue now has the prospect of unending losses.

    Anyone can see that the sensible approach for HP would be to save the last of the company's crown jewels, the printer business, by simply exiting the consumer and small business PC markets, both HP and Compaq brands. This would have eliminated competing head-to-head with Dell and probably avoided provoking Dell into trying to offer Dell's own brand of printers. The only problem would have been figuring out what was left for the company to do in the computing industry. Where can HP generate profit if on the high-end the product line is dependent on the Itanium processor, especially if Intel is now selling to anyone not just the processor but also the guts of entire systems? What exactly does HP own that is unique in the computing industry? Where's the beef?

    Perhaps the decline was inevitable once HP ceased to be a company of engineers who got things done. The company had reached the limits of organization. To have preserved the "HP Way" the company by the 1980s would have had to have morphed into a high-tech holding company whose "business" would have been using connections to Stanford and Berkeley to finance upstarts such as Steven Wozniak.

  • except HP employees...

    HP makes crap except for there high end Unix systems. An HP PC is nearly the worst, low end components, allowing no upgrade. HP printers USED to be decent, but they are now cheap plastic crap that breaks if you look at meanly. Lexmark printers blow away anything HP has put out in a long while, and there are several lines better than that...The ones I feel sorry for are the old compaq support folks, who now get to service and support the wonder HP desktop...arghhh that would be enough to make me go look for another job.
  • quoth the article:
    • Dell spokesman Mike Maher said his company would still sell HP branded printers that it purchases through distributors
    Just in case you didnt read the article, and believed the headline.
  • I think this was a smart move for HP. While Dell's plans to make their own printer line may help them in the long run, they still need the support of HP and Epson for now because as of today they still do not have their own line of printers.

    So HP capitalizes on this and will hurt Dell in the short-term but not supplying Dell with HP's while Dell waits for its own brand to be ready.

    This really is just capitalism at work. Like their printers or not, offering HP's line helps Dell sell more boxes and helped HP. Now Dell is in direct competition with HP, would you want to help out your comptetitor? Hell, no.

    Dell and the other MS pushing shops need to add value wherever they can to the products that they sell yet don't have any control over. If I'm looking for a new Windoze box with an HP printer and I can get it from company X or company Y but X only offers X's own printer, I'll just go to Y and get my bundled printer. And I generalize with company X and Y b/c that's really all Dell, Compaq, and Gateway, etc, are in the PC business.

    While Dell's lame commercials may have driven business from all the moron's who somehow think a Dell is better than a Gateway or any other brand, what it really comes down to is: "Dude, you got a Windoze box." Period.

  • Printers for 99% of all applications are made by HP. Unless Dell printers are rebranded Canons there is no earthly reason to buy them. Where will you get supplies, how long will they honor warranties? Printers are mechanical devices and they break and wear out.

    Who's gonna march into their own personal Viet Nam for driver development and support? Even Lexmark can't get this right and that's all they do.
  • There are plenty of other printer companies to make up for that: Lexmark, Epson, other Japanese ones, ...

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