HP hit by print slump

20 August 2009

NEW YORK: The world's biggest computer company Hewlett-Packard has reported falling sales and profits, driven in part by what looks like a strike by reluctant printer customers.

Printer ink is said to be one of the most expensive liquids on earth, dearer than some expensive perfumes and, as such, has delivered far higher margins than computer hardware and software.

But in its third quarter results H-P's printing and imaging revenue fell 20% to $5.7bn (€4bn, £3.6bn) with supplies falling 13% and sales of printers 20%.

Altogether H-P's profits fell 19% to $1.6bn (€1.1bn, £1bn) while revenue dropped slightly from $28bn (€19.8bn, £17.9bn) to $27.5bn (€19.5bn, £17.6bn), suggesting a degree of cost-cutting and lower sales of higher-margin products.

In the recession both companies and individuals have tried to cut back on printer use, particularly expensive-to-run colour models.

The printer market has also been hit by the phenomenal growth of online video, web-based TV and social networking sites, none of which lend themselves to printing.

There is also a growing trend towards the use of digital documents that can be read on mobile devices as well as computer screens.

"People have learned some of these lessons more rapidly as a result of the economic conditions than they have in the past," says Lyra Research analyst Steve Reynolds. "My thought is that some of these habits will become permanent. And aTwitter stream is not printable.”"

H-P is fighting back by developing software that can manipulate web content such as photos from social networking sites for print. It is also trying to persuade more businesses to buy its high-end digital printers to use in-house rather than send out jobs to commercial printers.

Data sourced from New York Times; additional content by WARC staff