The cut-throat business of printer cartridges

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The problem with cut-throat razors, as any Harvard MBA will tell you, is that they last for ages. Disposable blades make much more sense; sell the handles at cost price and make money on repeat sales of relatively expensive blades from which the worst injury you can expect is a neck that looks as though it has been chaffed by a cheese grater. Printer manufacturers have been quick to catch on, and who could blame them? Sell cheap printers and hook your customers on the ink cartridges. People have long joked that HP, the mother of all printer makers, is really just a toner or ink company with very fancy toner delivery packaging -- printers. If you are a printer manufacturer there are some sound business reasons for following the path cut by Gillette, not least of which is that it makes it easier to predict (and improve) revenues several years down the line. And, there is a lot more money to made from selling cartridges than there is to be made from selling printers. Indeed, some estimate the cartridge business accounts for 90 percent of the £19bn annual global printer market. But what about the consumer? We should be winners too; buy a cheap printer and then, with all the sources of ink cartridges available, shop around for the best buy. After all, ink is hardly expensive. Well, that's the theory. In practice, the picture painted by the printer business is not quite so clear-cut. Take HP. It is in the US courts defending defending the sale of half-full ink cartridges with its printers. The three Minnesota women who are taking HP to court claim the company doesn't reveal that the 'economy cartridges' installed on new printers are only half full of ink. It's not so much the practice of selling new printers with half-full cartridges that seems to be aggravating consumers. After all, there is life in the argument that says buyers should realise that an 'economy' ink cartridge has missing something, and reason dictates that this will be ink or cartridge. It's the use of tactics to stop third-party ink makers from selling cheaper cartridges to fit into printers that is raising hackles. Lexmark was recently vilified in the press for turning to the notorious Digital Millennium Copyright Act, which has been used (not always successfully) by everyone from e-book software vendors to garage door remote control makers to protect their business models. The DMCA, as it has come be known, was intended to stop people circumventing anti-copyright technologies, not to stop people making printer cartridges. Lexmark is the second largest printer maker, behind Hewlett-Packard. The reason Lexmark felt able to turn to the DMCA was that its cartridges -- in common with many of those from other printer makers -- have a "smart chip" that identifies them as the genuine article. Companies who make smart chips so that after-market cartridge vendors can fool the printer into accepting their products are, it is claimed, violating the DMCA.

Talkback

It was very interesting to read your page and I'm glad that I did, I'm some-what the wiser for it, in the past I have always gone for refills cartriges but I have bought myself a new lexmark all in one package can I still get refills for my new printer?
I find that the lexmark colour cartrige runs out very quickly but even when the cartriges gage on screen shows me that the cartrige is empty I still get great photos. Why is this?

Alex

via Facebook 8 October, 2005 19:31
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