HP CEO talks up HP-ink-only print hardware and higher upfront costs for machines that use other cartridges
- Reference: 1606397648
- News link: https://www.theregister.co.uk/2020/11/26/hp_says_its_cutting_back/
- Source link:
Over the years, billions of pounds in profit was generated by HP's ink and toner business – the area upon which the company built its fortunes. But then things turned sour in 2019: more customers were lured by cheaper alternatives from "cloners" or re-manufacturers' supplies and HP overegged sales forecasts, resulting in more more than £100m on excess inventory struggling to find a home.
The solution, as outlined [1]13 months ago at HP's Securities Analyst Meeting , was to raise the upfront price of printer hardware for customers who didn't want to use HP-branded supplies. And for those who did, to create hardware that locked down the use of non-HP ink or toner.
This week, when talking to [2]analysts about Q4 financial results , Lores alluded to the current state of play. "We continue to evolve our print business models with our drive towards services and a rebalance of profitability between hardware and supply."
He added: "We are making progress on rebalancing the business model between hardware and supplies. We are expanding profit upfront with 69 per cent unit growth on SES or Big Inc. We have improved consumer hardware AIU year-over-year through selective price increases, new product innovations and lower discounts."
Just this month HP began to roll out HP+, [3]described as an "end-to-end platform strategy" that ties customers into only using HP ink, which "provides a differentiated value proposition for our loyal customers," said Lores.
HP+ includes web-connected "standard print hardware", which HP says "automatically detects and fixes connectivity issues", the Smart Security monitoring system, native in-OS printing, and a Forest First feature where every page printed is "balanced with investments to help protect and restore forests in equal measure."
HP CEO: Help us save the world one tree at a time... by printing stuff (with our kit, of course) [4]READ MORE
The requirements of HP+? An HP account, internet connection, and "use of Original HP Ink or Toner for the lifetime of the printer." It comes with no subscription but HP is dangling a six-month trial of Instant Ink, the service that caused some annoyance recently when [5]HP ended the print-for-free lifetime deal and swapped it with a monthly payment plan.
Lores said during the analyst conference call that Instant Ink was up double digits in Q4 "surpassing our target of eight million enrollees."
Another feature is Private Pick-up, which only releases documents when the user is at the printer – particularly helpful for office users working at home or people who don't want their family members to see what they are printing.
"We plan to extend HP Plus across most of our home and small office portfolio in developed markets," said Lores.
"Together, we expect these actions will help us to optimize the business by reducing the number of unprofitable customers."
For [6]HP's Q4 ended 31 October , the group turned over $15.258bn in sales, flat with the same period a year ago – demonstrating the contrasting fortunes of HP: sales to business were down and sales to consumers were up.
The PC business was flat at $10.432bn. Within this notebooks grew 18 per cent to $7.4bn, desktop was down 28 per cent to $2.253bn, and workstation was down 45 per cent to $355m. Consumer net revenue was up 24 per cent and commercial net revenue down 12 per cent.
HP: That print-free-for-life deal we promised you? Well, now it's pay-per-month to continue using your printer ink [7]READ MORE
The printer division was down 3 per cent to $4.826bn, supplies was down 1 per cent to $3.131bn, commercial hardware fell 22 per cent to $923m, and consumer hardware was up 21 per cent to $772m. For the period, HP reported an operating profit of $992m, up some $44m on a year earlier. This was helped by HP chopping $397m in costs in the quarter, including via redundancies and by exiting 30 real estate sites. ®
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[1] https://www.theregister.com/2019/10/09/hp_supplies/
[2] https://seekingalpha.com/article/4391407-hp-inc-hpq-ceo-enrique-lores-on-q4-2020-results-earnings-call-transcript
[3] https://www8.hp.com/us/en/printers/hp-plus.html#section=faq
[4] https://www.theregister.com/2019/10/22/hp_ceo_help_us_save_the_world_one_tree_at_a_time_by_not_stopping_printing/
[5] https://www.theregister.com/2020/11/12/hp_free_printing/
[6] https://investor.hp.com/news/press-release-details/2020/HP-Inc.-Reports-Fiscal-2020-Full-Year-and-Fourth-Quarter-Results/default.aspx
[7] https://www.theregister.com/2020/11/12/hp_free_printing/
[8] https://whitepapers.theregister.com/
Dictionary
I just checked my dictionary for definitions of "loyal customer". I found, among other things, "mug", "captive - see prisoner" and "fool - see ...and his money".
yet another snooper on everything I do?
' HP+ includes web-connected standard print hardware [...] the Smart Security monitoring system[...] and a Forest First feature where every page printed is "balanced with investments to help protect and restore forests in equal measure." '
In order to "balance every page printed" with anything, I guess HP must find out about it. Thanks a lot. HP was founded with an ethic of service to the community, but as well as potentially being excessively intrusive this version of such service seems to be PR driven greenwash waffle shop talk. If you really want to save trees, stop manufacturing printers and printer paper. If they're a component of your revenue stream, live with it without trying to sound holier than your customers. Both Hewlett and Packard are probably revolving on their respective axes at high speed.
Re: yet another snooper on everything I do?
I've yet to see an automatic service to fix connection issues that is really working. All that blah blah is actually to hide the only feature HP is interested in is to check if your using their ink and brick your printer if you don't.
Anyway it's OK for me to pay more a printer without paying most of it with every ink or toner cartridge I buy. Frankly, I would prefer an expensive printer and cheap ink - so I'm not deterred to print as much as I like because the inks cost and make me pay the same printer several times. With photos, even with a full CMM system, sometimes nailing a print requires some attempts, because previews are can't never be exact.
The problems:
People are still buying printers, but they don't print anything like as frequently as before.
My Canon Laser mostly gets used for its scanner function. The toner that came with it looks like it will last me about 10 years.
HP Printers are not built anything like as solidly as before. That means that people will be buying the loss-leader printer hardware more frequently.
Re: The problems:
Quite - not sure where but I'm sure I've seen that inkjets need to be used reasonably frequently to stop being a dried out mess. I print something probably once every 2 months on average. My next printer choice will likely be a laser - and not an HP one.
Also - just sell the bloody printer at the cost of the printer. HP must be a massive contributor to electrical waste - any average-consumer printer they sell, you're as well throwing the whole thing away than buying HP ink to top it up.
Re: The problems:
Inkjet printers definitely need to be used. The ink is expected to dry within a second or two of hitting the paper, but stay completely liquid in the printhead and tank. It's inherent in the technology.
If you don't print often, don't get inkjet.
Printers go on the IoT LAN
I haven't done any business with HP since 2002, after they first abused the DMCA (the SNOsoft issue). I haven't seen any reason to change that position in nearly 20 years as they have followed up with many other abusive actions.
However, even my Brother printer is on my IoT LAN and does not have access to the Internet. I certainly wouldn't let any HP device have access to the Internet, if I had any. The sort of crap in the article is exactly the reason: I am willing to pay for IT gear - then it is mine and it will do what I tell it to, without further contact or payment to the supplier.
I guess I'm an unprofitable disloyal customer then
For home use I still have my trusty Laserjet 6P that is 2 decades old, and it gets fed remanufactured toners once in a blue moon. It just sites quietly on the LAN (via a tiny PrintSir server) and does what it's told.
When it dies, I'll atttempt to fix it. After that, I'll be buying from someone else.
Re: I guess I'm an unprofitable disloyal customer then
Me too - I'm using (when it's turned on) an HP LaserJet 4M plus/ps with a duplex feeder. I think it was introduced in 1994. The printer replaced a LaserJet 2 that I was using in 1991. What reason do I have to "upgrade" a black and white laser printer that prints one or two pages a month?
For color I print on an Epson 2500 series with refillable tanks. $12 for a bottle that an refill a single color tank multiple times or an HP that is makes you buy a new cartridge for three times that when you run out of one color? And HP printers wear out too easily now -
Times change
HP inc Guy CEO E. Lores think than people consumers simply by be HP, purchase their products, I believe is too much arrogance by part Lores and market pull down that retrograde opinion.
Private Pickup?
"helpful for office users working at home or people who don't want their family members to see what they are printing" Here's a clue - don't print it. Super secure and planet friendly.
Re: Private Pickup?
Yes, I was wondering what type of job and home environment someone who has this problem has, as clearly they wouldn't be working for the (UK) government.
Having implemented secure/privacy enhanced printing capabilities decades back, I would hope that this new feature is not HP proprietary but is open (ie. contributed to MOPRIA) so that Enterprises that already operate these solutions in their offices can simply add/include the home printer.
What is "lifetime" ?
"use of Original HP Ink or Toner for the lifetime of the printer."
Normally a vendor seems to define "lifetime" as "until the next model is out", ie probably a couple of years. What is the betting that for these things "lifetime" will be much longer ?
Slightly dangerous precedent
Suppose Microsoft decides on an exclusive deal with Epson "to benefit customers, surpass business model, etc" - and the next update blocks HP printers from Windows?
Well looks like it's time to stop selling HP printers
This will be a huge hassle for businesses and is a stupid idea to boot because it says that HP can't actually manufacture at a sensible price, and thus charge over the odds compared to smaller businesses.
New scammer opportunities open up...
... web-connected "standard print hardware", which HP says "automatically detects and fixes connectivity issues" ...
"Hi my name is May Dup from HP Technical Support. Your printer has told us there are connectivity issues - please download this softwares which will give us access to your PC, bank details etc etc in order to fix your internet."
Thanks for the warning
First test of an ISP: if the help line is a premium rate number then faults are considered a revenue stream. (If you have to deal with one of these call the sales number and get transferred.)
If HP+ "automatically detects and fixes connectivity issues" that makes me suspect HP- "automatically breaks connectivity to create issues" in an attempt to get me to switch to their locked-in tier.
Bought bypass chips
The HP locked down printers were never really that effective. WHen the system said the original toners were empty, a quick shake proved they still had toner in them. I bought bypass chips that I replaced on the toners, and continued using them. Proved what a rip off even genuine HP supplies were with a genuine HP printer. I trust nothing that comes out of HP's official mouth, and even less on what their printers said. Net result... when the toners finally gave out, I bought a different printer. (actually I had a faulty one and repaired it... but even that's cutting a long story short.)