Epson Ups Inkjet Ante With Game-Changing Pricing Model Ahead Of Rival HP's Reboot

Epson has introduced a new line of EcoTank color inkjet printers that it says turns the age-old printing sales model on its side by upping the price on printer hardware and significantly dropping the price of ink. Epson unveiled the new line of printers, due to go on sale in this September, at a New York news event Tuesday.

Epson said its EcoTank printers offer businesses and its ImageWay channel partners an alternative to office printers with expensive laser or inkjet cartridges that need be replaced often. Epson’s EcoTank printers have large, refillable ink tanks that don’t need to be replaced for two years on average.

With this line of printers, Epson focused less on developing a printer that ’runs a little bit faster, is a little bit cheaper and a with [print quality] a little more beautiful," and more on tackling the age-old pain point of replacing expensive ink cartridges, said Minoru Usui, president of Tokyo-based tech giant Epson. EcoTank, Usui said, at Tuesday's event, is ’not necessarily a new product or feature, but a breakthrough business model that will change completely the model of office printing.’

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The move comes as the battle to drive higher profits with more lucrative color printer sales in businesses intensifies among market share leaders HP, Canon and Epson. While color represents only 10 percent of what’s printed in offices, the color hardware and reoccurring ink cartridge revenue is far more lucrative than the competing monochrome laser printer business.

’More color in work groups and commercial printing is the Holy Grail for printer manufacturers,’ said Amy Machado, senior research analyst for IDC's Hardcopy Peripheral Solutions programs. ’Epson is betting on companies' wanting to pay a little more upfront for printers to realize a lot of convenience and savings on the back end,’ she said.

Color inkjet has a reputation for being expensive, temperamental and expensive, requiring the replacement of ink cartridges often by technicians. But with the launch of EcoTank, Epson has muted those critics by pairing large-capacity ink tanks for printers that can go years without needing a refill. Epson further reduces maintenance cost with permanent mechanical print heads that last the life of a printer -- rather than disposable thermal ones used by competitors.

’Our goal is to grow color in the workplace from 10 percent color to 20 percent,’ said John Lang, president and chief executive officer for Epson America. He said that by flipping the traditional color printer sales model on its side, it gives Epson a huge pricing and quality advantage over HP in the color laser business printer market.

Lang said the top-line EcoTank model, WorkForce Pro WF-R4640, runs $1,200, is aimed at small businesses and supports two-sided printing and a 580-sheet capacity. The printer uses high-capacity ink packs (not cartridges) with a claimed print-out yield of 20,000 pages with black text or graphics and 20,000 color pages. Epson claims the savings is 50 percent to 70 percent, compared with traditional thermal inkjet cartridge technology.

While Epson’s EcoTank line of printers is mainly aimed at consumers and small businesses, the company is also eyeing the medium-sized business with a commercial line of inkjet printers that use the same large-capacity refillable ink tanks. Commercial bulk-ink offerings include the WorkForce Pro WF-5690 All-in-One for $400 and the Epson WorkForce Pro WF-8090 Network Color Printer for $800, introduced earlier this year.

’This is an interesting approach to solving a real pain point with printing,’ said Joe Jones, owner of Big Systems, an Epson partner based in Menomonee Falls, Wis. ’The bulk [ink] option is growing more prevalent. I think everyone is thinking about cost per copy. Paying more upfront for the hardware and less on the consumables has a strong appeal for high-volume printing and brings down the cost per page significantly.’

Keith Kratzberg, senior vice president, sales and marketing, Epson America, said the reason why traditional VARs have not been as involved with printer solutions is a result of the way the business model has worked. He said the razor-blade model of selling printers to companies offered no margins on the front end when placing a printer in a business. Margins, for partners, are on replacement ink, service and support.

’The beauty of EcoTank is that it changes the business model,’ Kratzberg said. ’When you place an EcoTank like the R-4650 into a small business, you are delivering all the value in one shot.’ Upfront margins on printer sales, he said, will attract partners. ’Everything is on the front end -- hardware, supplies and margins.’

Epson’s goal, Lang said, was to bridge the price-per-page price delta between color and monochrome laser. ’What do you do in your life in black and white? Why should printing be any different?’ he said.

PUBLISHED AUG. 5, 2015