September 24, 2013
QZ.com reported on the recently-introduced programme, Instant Ink, which forms part of the OEM’s effort “to get people to subscribe to printer ink” and in turn locking them into “making a purchase every month by default”.
CEO Meg Whitman is said to have “enthusiasm” for the programme, with printing still forming 22 percent of HP’s revenue, but QZ.com pointed out that the programme “requires that users invest a lot of trust in HP”, as it works by the user’s internet-connected printer telling HP “how many pages they’re printing every month”, with HP sending inkjet cartridges “as needed”.
HP’s site for Instant Ink in turn notes that “ink, shipping and cartridge recycling are included in plans”, with the pricing based on “pages printed, not cartridges used”, with no annual fees and the ability to “change or cancel plans anytime”. The Instant Ink cartridges are also said by the OEM to have “more ink than standard HP ink cartridges, so you’ll replace them less often”.
In financial terms, three plans demonstrate the programme’s scale. The first, occasional printing, is $2.99 (€2.21) a month or $36 (€26) a year for 50 pages, which HP states saves $84 (€62) over a year in comparison to spending $120 (€88) a year on standard cartridges (based on printing 600 ISO pages in one year). The second, moderate printing, comes in at $4.99 (€3.69) a month, $60 (€44) a year for 100 pages a month (or 1,200 a year), and offers a supposed saving of $180 (€133) a year in comparison to spending $240 (€177) on standard cartridges.
The final model, frequent printing, comes in at $9.99 (€7.40) a month and $120 (€88) a year, for 300 pages a month or 3,600 pages a year. This comes in at a saving of $600 (€444) a year, compared to the standard cartridges purchases adding up to $720 (€533) a year. All of the models are based on the “estimated street price” of $35 (€25) for a set of cartridges.
Likening this approach to the “telecoms’ model of pricing”, the website notes that “additional pages” would cost more for users, so if “user behaviour for printing follows that of telecom customers, HP Instant Ink customers could end up overpaying”, by either going for a small plan they overspend on, or a large plan they don’t fully utilise.
The site noted that the “added convenience” to be found in the programme may “be enough to lure customers who care less about price” into joining the programme, and if HP can convince users that the programme “is worth” the convenience, “it might make a difference to the company’s bottom line”, but the growth of the paperless office, and the increase in tablet use might mean Instant Ink “may merely allow HP to decline a little more slowly”.
Categories : Around the Industry