After decades of flogging cheap printers that have expensive ink cartridges, Epson is coming up with a different business model.
From September the outfit will offer a new line of consumer printers in the US, each with enough ink to print at least 4,000 documents. When the well finally runs dry, customers can fill it with a bottle.
John Lang, Epson’s chief executive officer for North America, said the move is good news for the consumer.
“That anxiety and that fear of running out of ink—it’s amazing to me that that was so prevalent.”
Epson’s home and small business models come with enough ink to rip off only 220 or so documents. What’s more, they don’t play nice with third party cartridges, and the whole range of colours needs replacing when one runs dry.
The strategy of having a low initial price for the unit does a nice job of hooking consumers and the model provides a consistent and predictable stream of profit. The only real problem is that customers hate it with a passion normally only reserved for serial killers of children.
For years, Epson grappled with a number of large class actions from customers who noticed their cartridges still had ink in them when the printer demanded they be replaced. Epson argued that the reserve was needed to make a smooth transition, but in 2006 it settled the grievances, awarding customers a $45 credit per printer.
Now Epson plans to make its money on the front end. The cheapest of its five new printers starts at about $379, compared with the $60 required to get Epson’s current no frills model. And the company’s hoping to benefit from being the first mover on this front.
Lang thinks that in a few years, one quarter of printer revenue will be flowing into giant inkwell models, although it will continue to offer machines that take cartridges as well.
Lang, the Epson chief, says the company didn’t offer inkwell units sooner because it was afraid people would balk at the higher initial price. But actually Epson has been flogging similar versions for years in Asia and South America, territories where ink pirates are particularly aggressive.
The maker of expensive printer ink, HP, reported a quarterly revenue that thrashed analysts’ estimates, thanks to growth in its systems business that sells notebooks and desktops and the acquisition of Samsung’s printer business.
