Hearing Dell’s Footsteps, HP Strikes A Pose

With Dell gearing up to enter the printer market as a
potentially formidable challenger, incumbent HP pointed
to new research figures showing its lead in the market growing wider.

HP pointed to IDC’s U.S. Printer Tracker for the first quarter, which showed
the printer maker maintaining its top spot in the industry and nearing a
majority market share. According to IDC, HP grew its overall market share
from 46 percent to just a hair under 50 percent, compared to the previous
quarter. The other three major printer forces trailed HP: Lexmark, 18
percent; Epson, 17 percent; and Cannon, 10 percent.

“Our strides in market share leadership are due to customer responsiveness
and unmatched reliability,” said Lee Ray Massey, a senior VP in HP’s imaging
and printing unit, in a statement.

A key area of growth for HP was in the monochrome laser printer segment,
where it grew its dominant position from 69 percent to 77 percent. Much of
its gains came at the expense of Lexmark, whose market share declined 41
percent, according to IDC.

HP’s flexing in the mirror comes as it prepares to take on a new challenger
to its long unquestioned supremacy in the printer market. Dell, after
considering whether to enter the printer market for some time, appears ready
to take the plunge. The company has not announced any specific plans, but
most in the industry, including HP, expect it will do so sooner or later.

Last month, HP fired the
first shot across Dell’s bow
, terminating the companies’ reseller
agreement on the grounds that Dell was a likely competitor. The move, while
mostly symbolic, was seen as an indication of the seriousness HP takes a
challenge from Dell. Later, n HP executive criticized Dell’s strategy for
selling ink-jet cartridges over the Web as flawed.

For the Round Rock, Tex., computer maker, a printer business would give it
the opportunity to move its direct-sales expertise into a market that would
provide insurance against sluggish PC sales and an annuities stream from
selling peripherals, like ink cartridges.

Although Gartner Dataquest estimates the U.S. printer market will be worth
$5.8 billion this year, Dell would need to fight a mature market with a host
of established companies, which IDC’s Printer Tracker pegged as controlling
95 percent of the market.

IDC analyst Claudio Checchia warned that Dell’s online selling expertise
might not translate smoothly into the printer market.

“PC makers entering the printer market have had a tough time,” he said.
“Dell is going to move products, but the extent of what they can really do
remains to be seen.”

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