Ink 2.0: An End To Lasers?

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Where's the least likely place you'd expect to find an inkjet printer?

a) In your home

b) At the workplace

c) In the dumpster out back, along with its messy, expensive cartridges

Many people would likely answer b) to that question (although c would also be acceptable), as laser is the technology of choice for office printing. Cheap inkjet printers--primarily consumer and home units--have given the technology a bad rap.

That perception may be changing as new technology advances in inkjet printing, coupled with the rise of business color printing, could make inkjet printers a serious challenger to business-class laser printing.

Skeptical? You should be.

Inkjet technology has largely earned the reputation of being inferior to laser in black-and-white office printing. But if color printing continues to make inroads in the office, inkjet--which has color-printing advantages over laser--is getting a second look.

"We see a very large opportunity for ink to be successful in business from SMBs up through the enterprise," says Hatem Mostafa, senior vice president of Hewlett-Packard's inkjet systems.

Several printer vendors are developing next-generation inkjet printers, which they say are faster and more reliable than their predecessors.

The Money of Color

Color laser is the fastest-growing segment of the U.S. printer market, with a compound annual growth rate of 15 percent from 2005 to 2010, according to market research firm IDC.

VARs, too, say they've seen an uptick in color printing sales.

"Our color-laser business in 2000 was very close to zero," says Jim Fall, vice president of strategic planning at Indianapolis-based Cannon IV, which supports nearly 20,000 printers under managed services contracts. "Today, color is about 25 percent of our overall business."

There are some doubts, however, about how much traction color will gain in the office, as many businesses are still gun-shy about the high costs of color printing. Still, though, if color reaches even 25 percent of printing in businesses, the door is wide open for inkjet printers. In 2006, the total market for digital hard-copy peripherals, ink and toner supplies was about $35.5 billion, according to IDC.

Two years ago, HP introduced its Scalable Print Technology, the fruit of a $1.4 billion, five-year research and development initiative that changed the way HP designed and made inkjet printheads.

The new architecture enables faster development cycles at half the cost, improves the accuracy of ink-drop placement and allows for more nozzles to fit on a single printhead. In addition, the printhead width, and the number of nozzles and inks can be changed depending on desired performance and cost. That way, the manufacturer can use a single platform to scale from the consumer market all the way up to the enterprise.

At the launch of the new architecture, HP introduced several new photo printers. Since then, it's also launched several new office products. For instance, it released last fall the OfficeJet Pro K550 color printer, which became the fastest desktop printer in its segment--of any inkjet or laser printer. The vendor followed that up last March with an all-in-one series, the Officejet Pro L7000, positioned for small businesses. The all-in-ones print at speeds comparable to that of low-end color laser printers and cost 6 cents per color page--comparable to laser printers in the same class. The printers use new HP ink and paper supplies that enable the ink to dry more quickly. Consumables make up the largest portion of HP's profits and are a lucrative revenue source for VARs.

Most recently, HP rolled out a new line of department-level multifunction printers based on its Edgeline technology, an extension of Scalable Print. Edgeline, which employs fixed printheads that span the width of the paper passing through the printer, results in more accurate ink-drop placement and faster speeds. HP says the printheads offer improved reliability, less maintenance and lower operating costs.

Although HP will likely sell many of the larger Edgeline machines directly to businesses, it's also selling them through select partners, and VARs say sales are promising so far.

"We just spoke with a customer this week that was looking to replace all its black-and-white copiers with Edgeline devices," Fall says. "The quality of image on an inkjet is so much better than color laser, and as you get higher quality at lower cost, I expect to see a major shift in the marketplace."

That's not to say HP is abandoning its laser-printing business. For now, it's targeting its ink products at SMBs and company departments, leaving the workgroup printing market to lasers.

But could that change? Possibly.

"I think ink is capable of playing in the workgroup area in the next five years," says Michael Hoffman, senior vice president of supplies at HP.

Another factor in all of this is how HP's relationship with Canon, which sells HP its laser-printer engines, would be affected if HP moves deeper into the workgroup space.

"If HP lets inkjet play across the board, you wonder if that would be threatening to its Canon relationship and possibly fuel Canon's development of ink and the loss of HP's laser business," notes Angele Boyd, group vice president of Imaging/Output & SMB Practices at IDC.