HP CEO talks up HP-ink-only print hardware and higher upfront costs for machines that use other cartridges

'These actions will help us to optimize the business by reducing the number of unprofitable customers'

HP might have dropped the Ink Inc from its corporate banner but CEO Enrique Lores is still mining for the black gold: with the firm clawing back cash by slapping away the grubby hands of its pesky "unprofitable customers" from its printing rig.

Over the years, billions of pounds in profit was generated by HP's ink and toner business – the area upon which the company built its fortunes. But then things turned sour in 2019: more customers were lured by cheaper alternatives from supplies "cloners" or re-manufacturers' and HP overegged sales forecasts, resulting in more more than £100m of excess inventory struggling to find a home.

The solution, as outlined 13 months ago at HP's Securities Analyst Meeting, was to raise the upfront price of printer hardware for customers who didn't want to use HP-branded supplies. And for those who did, to create hardware that locked down the use of non-HP ink or toner.

This week, when talking to analysts about Q4 financial results, Lores alluded to the current state of play. "We continue to evolve our print business models with our drive towards services and a rebalance of profitability between hardware and supply."

He added: "We are making progress on rebalancing the business model between hardware and supplies. We are expanding profit upfront with 69 per cent unit growth on SES or Big Inc. We have improved consumer hardware AIU year-over-year through selective price increases, new product innovations and lower discounts."

Just this month HP began to roll out HP+, described as an "end-to-end platform strategy" that ties customers into only using HP ink, which "provides a differentiated value proposition for our loyal customers," said Lores.

HP+ includes web-connected "standard print hardware", which HP says "automatically detects and fixes connectivity issues", the Smart Security monitoring system, native in-OS printing, and a Forest First feature where every page printed is "balanced with investments to help protect and restore forests in equal measure."


HP CEO: Help us save the world one tree at a time... by printing stuff (with our kit, of course)


The requirements of HP+? An HP account, internet connection, and "use of Original HP Ink or Toner for the lifetime of the printer." It comes with no subscription but HP is dangling a six-month trial of Instant Ink, the service that caused some annoyance recently when HP ended the print-for-free lifetime deal and swapped it with a monthly payment plan.

Lores said during the analyst conference call that Instant Ink was up double digits in Q4 "surpassing our target of eight million enrollees."

Another feature is Private Pick-up, which only releases documents when the user is at the printer – particularly helpful for office users working at home or people who don't want their family members to see what they are printing.

"We plan to extend HP Plus across most of our home and small office portfolio in developed markets," said Lores.

"Together, we expect these actions will help us to optimize the business by reducing the number of unprofitable customers."

For HP's Q4 ended 31 October, the group turned over $15.258bn in sales, flat with the same period a year ago – demonstrating the contrasting fortunes of HP: sales to business were down and sales to consumers were up.

The PC business was flat at $10.432bn. Within this notebooks grew 18 per cent to $7.4bn, desktop was down 28 per cent to $2.253bn, and workstation was down 45 per cent to $355m. Consumer net revenue was up 24 per cent and commercial net revenue down 12 per cent.


HP: That print-free-for-life deal we promised you? Well, now it's pay-per-month to continue using your printer ink


The printer division was down 3 per cent to $4.826bn, supplies was down 1 per cent to $3.131bn, commercial hardware fell 22 per cent to $923m, and consumer hardware was up 21 per cent to $772m. For the period, HP reported an operating profit of $992m, up some $44m on a year earlier. This was helped by HP chopping $397m in costs in the quarter, including via redundancies and by exiting 30 real estate sites. ®

Similar topics

Narrower topics

Other stories you might like

  • US won’t prosecute ‘good faith’ security researchers under CFAA
    Well, that clears things up? Maybe not.

    The US Justice Department has directed prosecutors not to charge "good-faith security researchers" with violating the Computer Fraud and Abuse Act (CFAA) if their reasons for hacking are ethical — things like bug hunting, responsible vulnerability disclosure, or above-board penetration testing.

    Good-faith, according to the policy [PDF], means using a computer "solely for purposes of good-faith testing, investigation, and/or correction of a security flaw or vulnerability."

    Additionally, this activity must be "carried out in a manner designed to avoid any harm to individuals or the public, and where the information derived from the activity is used primarily to promote the security or safety of the class of devices, machines, or online services to which the accessed computer belongs, or those who use such devices, machines, or online services."

    Continue reading
  • Intel plans immersion lab to chill its power-hungry chips
    AI chips are sucking down 600W+ and the solution could be to drown them.

    Intel this week unveiled a $700 million sustainability initiative to try innovative liquid and immersion cooling technologies to the datacenter.

    The project will see Intel construct a 200,000-square-foot "mega lab" approximately 20 miles west of Portland at its Hillsboro campus, where the chipmaker will qualify, test, and demo its expansive — and power hungry — datacenter portfolio using a variety of cooling tech.

    Alongside the lab, the x86 giant unveiled an open reference design for immersion cooling systems for its chips that is being developed by Intel Taiwan. The chip giant is hoping to bring other Taiwanese manufacturers into the fold and it'll then be rolled out globally.

    Continue reading
  • US recovers a record $15m from the 3ve ad-fraud crew
    Swiss banks cough up around half of the proceeds of crime

    The US government has recovered over $15 million in proceeds from the 3ve digital advertising fraud operation that cost businesses more than $29 million for ads that were never viewed.

    "This forfeiture is the largest international cybercrime recovery in the history of the Eastern District of New York," US Attorney Breon Peace said in a statement

    The action, Peace added, "sends a powerful message to those involved in cyber fraud that there are no boundaries to prosecuting these bad actors and locating their ill-gotten assets wherever they are in the world."

    Continue reading

Biting the hand that feeds IT © 1998–2022