HP's $79 Apollo printers come to market

Hewlett-Packard's Apollo subsidiary today announced the first products to come from the new venture: two sleek printers priced below $100.

Apollo's debut printers, the P1200 series, feature HP's inkjet technology. Both the P1200 and the P1200I are priced at $79, the company said.

Apollo was launched earlier this year with the mandate to create stylish, inexpensive printers targeted at buyers of sub-$1,000 computers. The venture was seen as a low-risk way for Hewlett-Packard to enter the low end of the market without risking its brand name, traditionally associated with higher-quality products.

But some industry observers question whether these products will compete effectively against established low-end players like LexMark and Canon.

The Apollo line ostensibly exploits two industry trends: rock-bottom prices and sleek, space age design. But the printers introduced today are not the lowest-priced on the market, and are currently not compatible with Apple's iMac, the egg-shaped computer which has sparked the technology industry's renewed interest in industrial design.

In addition, although the new line leverages the HP brand name in a logo on each printer, the printers do not offer cutting-edge printing performance that HP is known for, analysts say.

The Apollo1200i is identical to the 1200, according to the company, but comes with an expanded software bundle and will likely be sold primarily through retail bundles. The printers, which will be available in blue and white, as well as gray, seem to emulate the iMac design, with rounded edges and colorful hardware.

But not only do the Apollo printers not currently offer iMac compatibility, rival Epson is expected to release a printer designed specifically for use with the iMac later this year, the Stylus Color 740i.

Also today, Apollo announced its retail partners, which include some names not generally associated with high-tech purchases, such as WalMart. The choice demonstrates the company's strategy of turning the printer into a consumer electronics item like a telephone or toaster. Low-cost printers are targeted at sub-$1,000 PC buyers, including students, first-time PC buyers, and families, said Mohan Garde, general manager of Apollo, in a conference call.

Sub-$150 printers doubled to account for 22 percent of the entire market in 1998, according to HP, which projects that the sub-$100 printers will account for 11 percent of the market by 2000.

Apollo printers will also be available at BestBuy, OfficeDepot. The printers will be available as stand-alone items, but Garde said the company is aggressively pursuing a strategy of bundling them with PCs.

In fact, these bundles will be the key to Apollo's success in the retail market, especially since LexMark currently offers a printer with similar performance for $59, said Gary Peterson, an analyst with ARS.

"In order to move these products they're going to have to rely heavily on PC bundles," Peterson said. "It's going to be quite a challenge."