B
bessie.gutmann
Ever since Kodak announced on February 6th its entrance into the
consumer photo inkjet arena, market analysts have been debating if
Kodak can compete in this already mature market, especially against
the printer giant Hewlett-Packard.
With its very profitable film sales market rapidly dwindling, Kodak
quickly needs another cash cow. Kodak's CEO, Antonio Perez, came to
Kodak three and a half years ago from HP's very profitable inkjet-
printer business, with a plan to revitalize the company through a
dramatic change in the consumer inkjet industry. Perez's plan was to
produce an inkjet printer and ink as good or better than the
competition, but to attack the thing that has aggravated consumers the
most-the high cost of inks.
Ink manufacturer profits often reaching over 75%, tempting companies
to sell their printers at or below cost, just to get the ink cartridge
sales (the old razor and razor blade principle). Kodak's plan is to
sell ink cartridges at prices that are one-half of their competition,
and still be highly profitable because consumers will be induced to
print more photos at the cheaper prices, and then buy more of their
ink. See related story:
http://www.InkjetNEWSandTIPS.com/news/2007-02-09.html
High-ranking executives from both HP and Epson have scoffed at Kodak's
plans to compete in their markets. Market analysts predict that it
will be difficult for Kodak to get shelf space at many of the big-box
stores because HP offers so many incentives to dealers to keep their
products in front of buyers, and exclude competitors. With so much on
the line, industry experts expect HP to pull out all the stops.
After reading Business Week's six page article ("Kodak's Moment of
Truth") in their February 19th issue, I believe Kodak and Perez's team
can pull this off. Analysts who have seen Kodak's printers have come
away impressed. Although this is a roll of the dice on a risky new
strategy to reinvent the inkjet printer, all the right pieces are in
place.
Susan Tousi, Kodak's head of R&D (and affectionately dubbed by her
colleagues as the "Queen of Geeks") kept sending the engineering staff
back to the drawing board to get it right, after having been told by
Perez, "We have only one chance to do this right. If our first
introduction fails, we fail."
Unlike HP, Kodak's EasyShare printers follow Epson and Canon's
philosophy of placing the print heads in the printer and not on the
ink cartridges. This allows the manufacturer to producer much cheaper
inkjet cartridges, because their main purpose is just to act as a
reservoir to hold ink. To really cut costs, Kodak could have gone with
the cheaper and less problematic dye ink technology. But dye inks fade
fast, often in less than 15 years, and dye made prints are very
susceptible to smudging and water damage. Kodak's R&D team spent
almost three years developing a new pigment ink technology that
produces water-resistant and fade-resistant prints that will last 100
years or more.
Kodak's inkjet printers have 3,840 nozzles that fire at a rate of
24,000 drops per second. The pigment inks dry in just 15 milliseconds
on Kodak's microporous papers, and the printers can produce a 4x6
print in 28 seconds.
The Kodak EasyShare All-in-One printers (starting at $149.99) are
focused on the consumer market, with black ink replacement cartridges
costing $9.99 and color $14.99 (all 5 colors). If consumers buy
Kodak's economical Photo Value Pack, which combines paper and ink, the
cost per print is about 10 cents, vs. 24 cents for HP's comparable
package and 29 cents for Epson's.
To kick-start distribution, Kodak has made a deal with Best Buy Co, to
be the exclusive retailer of these products for the first three
months, beginning in March, when the printers are introduced.
Royce Bair
Tips, news, reviews and resources...
http://www.InkjetNEWSandTIPS.com/
consumer photo inkjet arena, market analysts have been debating if
Kodak can compete in this already mature market, especially against
the printer giant Hewlett-Packard.
With its very profitable film sales market rapidly dwindling, Kodak
quickly needs another cash cow. Kodak's CEO, Antonio Perez, came to
Kodak three and a half years ago from HP's very profitable inkjet-
printer business, with a plan to revitalize the company through a
dramatic change in the consumer inkjet industry. Perez's plan was to
produce an inkjet printer and ink as good or better than the
competition, but to attack the thing that has aggravated consumers the
most-the high cost of inks.
Ink manufacturer profits often reaching over 75%, tempting companies
to sell their printers at or below cost, just to get the ink cartridge
sales (the old razor and razor blade principle). Kodak's plan is to
sell ink cartridges at prices that are one-half of their competition,
and still be highly profitable because consumers will be induced to
print more photos at the cheaper prices, and then buy more of their
ink. See related story:
http://www.InkjetNEWSandTIPS.com/news/2007-02-09.html
High-ranking executives from both HP and Epson have scoffed at Kodak's
plans to compete in their markets. Market analysts predict that it
will be difficult for Kodak to get shelf space at many of the big-box
stores because HP offers so many incentives to dealers to keep their
products in front of buyers, and exclude competitors. With so much on
the line, industry experts expect HP to pull out all the stops.
After reading Business Week's six page article ("Kodak's Moment of
Truth") in their February 19th issue, I believe Kodak and Perez's team
can pull this off. Analysts who have seen Kodak's printers have come
away impressed. Although this is a roll of the dice on a risky new
strategy to reinvent the inkjet printer, all the right pieces are in
place.
Susan Tousi, Kodak's head of R&D (and affectionately dubbed by her
colleagues as the "Queen of Geeks") kept sending the engineering staff
back to the drawing board to get it right, after having been told by
Perez, "We have only one chance to do this right. If our first
introduction fails, we fail."
Unlike HP, Kodak's EasyShare printers follow Epson and Canon's
philosophy of placing the print heads in the printer and not on the
ink cartridges. This allows the manufacturer to producer much cheaper
inkjet cartridges, because their main purpose is just to act as a
reservoir to hold ink. To really cut costs, Kodak could have gone with
the cheaper and less problematic dye ink technology. But dye inks fade
fast, often in less than 15 years, and dye made prints are very
susceptible to smudging and water damage. Kodak's R&D team spent
almost three years developing a new pigment ink technology that
produces water-resistant and fade-resistant prints that will last 100
years or more.
Kodak's inkjet printers have 3,840 nozzles that fire at a rate of
24,000 drops per second. The pigment inks dry in just 15 milliseconds
on Kodak's microporous papers, and the printers can produce a 4x6
print in 28 seconds.
The Kodak EasyShare All-in-One printers (starting at $149.99) are
focused on the consumer market, with black ink replacement cartridges
costing $9.99 and color $14.99 (all 5 colors). If consumers buy
Kodak's economical Photo Value Pack, which combines paper and ink, the
cost per print is about 10 cents, vs. 24 cents for HP's comparable
package and 29 cents for Epson's.
To kick-start distribution, Kodak has made a deal with Best Buy Co, to
be the exclusive retailer of these products for the first three
months, beginning in March, when the printers are introduced.
Royce Bair
Tips, news, reviews and resources...
http://www.InkjetNEWSandTIPS.com/