Hewlett-Packard ( (HPQ)
) has a new salve for its ailing printer business. Beset by falling demand for hardware and pricey ink, the division that once accounted for most of the computer maker's profit has seen sales drop 21%, to $11.9 billion this year.
So the Palo Alto (Calif.) company is adding new technology designed to integrate its core inkjet business more closely with the Web. On June 22 it unveiled a $399 printer called the HP Photosmart Premium with TouchSmart Web. The new device boasts a 4.3-in. touchscreen that lets users gain access to Web content, download it, and print out such things as coupons, movie tickets, and maps—all without having to use a computer.
The new printer represents the first phase of a plan by HP to revive growth by tying online services to everyday printing. "By giving people access to the content they want at the touch of a finger, the ability to customize their printing experience and create their own apps, and enabling easy 'one touch' wireless set up, we are driving a significant shift in how people will be printing in the future," says Vyomesh Joshi, an executive vice-president in HP's imaging-and-printing group.
Other efforts to revive growth in the printing division include a recently launched multimillion-dollar "value" advertising campaign. Aimed at building brand loyalty, it suggests that people will save money using HP ink over cheaper alternatives. HP also has been courting the small and midsize business market with new printing products and programs that offer ways to cut printing costs and reduce energy consumption.
connectivity is key
But it's not clear if the campaign will spur sales. Two years ago the company spent $300 million on a similar campaign that did little to reverse its fortunes
The weak global economy also hasn't helped. Thousands of workers are losing their jobs, and people are using less ink. IDC predicts that the number of printed pages will decline for the first time this year, to 1.47 trillion pages, from 1.5 trillion in 2008.
In the face of such declines, rivals have adopted new strategies to boost market share. Kodak ( (EK)
) earlier this year began heavily promoting its ink replacements as significantly cheaper than cartridges from HP, Epson, and others. Samsung has been focusing on creating stylish designs that entice shoppers to browse the aisles of Best Buy ( (BBY)
) and Fry's Electronics.
But analysts say companies need to get even more radical in the way they package and market printers, since consumers in growing numbers get their information online and store photos using Web sites instead of printing them. "The connected experience for consumers is the next stage of development in the imaging marketplace and will open up new revenue and growth opportunities," says Ed Lee, director of the consumer imaging services group at researcher Infotrends.
HP's Photosmart Premium printer offers Ethernet, wireless, and Bluetooth connections. When it goes on sale this fall, it will feature connections to Google ( (GOOG)
) Maps, Fandango, USAToday
, and Coupons Inc. DreamWorks Animation and Nickelodeon also will have applications that let viewers see trailers and print color book-like pages and games.