November 18, 2003 9:13 AM PST

HP launches new copiers

LAS VEGAS--Hewlett-Packard formally launched its assault on the upper reaches of the copier market on Tuesday, revealing new high-end devices and a partnership with office products dealer Ikon Office Solutions.

As previously reported, HP has been gearing up for this battle for some time. Recognizing it did not have all the pieces in place, the company earlier this year signed a deal with Konica to use its printer engines and began exploring new sales channels that were more along the lines of how companies buy their copiers.


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The market is seen as critical to HP's effort to keep its printer business growing at double-digit rates. The company also is gaining more attention from customers as they start to view printing as a way to wring more cost out of their business.

HP said it has about 1.5 percent of the high-end copier/printer market, but is aiming to boost that to 10 percent in the next three years.

"We're going to expand our business by taking business from the copier vendors," HP Senior Vice President George Mulhern said in an interview.

HP estimates that companies spend $800 per worker per year on printing and copying and have an opportunity to shave 30 percent off that cost, in many cases.

"As more content and business processes go digital, there is a tremendous opportunity for companies to harness the power of the network to improve productivity and reduce the operating costs across their imaging and printing environments," Vyomesh Joshi, HP's printing and imaging boss, said in a statement ahead of Tuesday's press conference. "HP's printing heritage and network management expertise puts us in a unique position to help companies take advantage of these new opportunities."

Specifically, HP added to its lineup the faster copier engine-based HP LaserJet 9055 and 9065 as well as the 85-page-per-minute HP 9085mfp, all multi-function products--that is, devices that can act as printers, scanners and copiers.

While analysts said that the company needed to offer faster products and expand its sales channels to compete, HP still faces significant competition from copier makers such as Xerox and Ricoh as well as printer rival Lexmark International. Although Lexmark does not compete at the upper end of the copier market, it has been going after the same document automation and copier convergence markets that HP is attacking.

Lexmark executives say that they are focused on adding software that allows their devices to automate more document processes and that it is most important to offer workgroup-based products that are near enough to workers that they will go to them.

Lexmark Vice President Randy Nelson said that in meetings his customers have said they are not interested in how many pages per minute the latest devices are capable of, but instead are focused on ways that they can reduce the amount of effort being spent on paper-based processes.

"Not a single spec was mentioned," said David Puterbaugh, product marketing manager at Lexmark.

HP also is boosting its software effort, including a digital pen-based form management system designed to cut the cost for companies from 90 cents per form to 20 cents. The system consists of HP printers, the company's server-based Workflow Connect software and a new digital pen. HP said it is initially targeting the 10 percent of the industry made up of the health care, banking, insurance, manufacturing and public sector markets.

Retailer Best Buy, chipmaker National Semiconductor and fast food giant Subway are among the new customers that HP is touting for its new products and services.

Bill Gott, editor of Printer Market Monitor, said HP's efforts to boost its sales channels should help, in particular the Ikon relationship. He noted, however, that Ikon has helped sell HP products in the past, including the ill-fated Mopier line.

"They had a partnership in the past," Gott said. "That has dissolved over the past couple of years."

Joshi countered that the company would not repeat its past errors.

"We made some mistakes," he said. "We learned from our mistakes."

One unanswered question is how much attention HP's products will get from Ikon as compared to products from copier makers. HP said it expects stronger support from Ikon, noting that the copier specialist is seeing more of its business shift from facilities departments, who are more familiar with copiers, to IT departments, where HP's brand is a selling point.

Ikon CEO Matthew Espe concurred.

"Our customers' IT oragnizations are increasingly becoming a big part of the decision process," he said in an interview.

In addition to Ikon, HP is adding other resellers with copier backgrounds. "I think their goal is to have a few hundred of those dealers across the country," Gott said.

 

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