There's A Storm Ahead for HP's Printer Business

When the troubled IT giant Hewlett-Packard, reports its quarterly results tomorrow, most analysts expect it to come through and meet, and perhaps even beat somealready-diminished expectations. Yet HP is facing a significant problem in a key market: Printing. HP's Imaging and Printing Group, or IPG accounts for roughly 20 percent of HP's revenue, making it a bigger business by revenue than the enterprise and server, storage and networking business. As it does with most printer vendors, the business model of IPG works like this: HP sells a printer, more often than not at a loss, then makes up for the loss by selling the customer ink and other supplies over the next several years of the printer's useful life. In this business HP is the king. In a survey of the state of the printing market issued last week, the market research firm IDC pegged HP's overall share at north of 41 percent. In 2011, by IDC's reckoning, HP sold more than twice the number of printers as its nearest rival Canon, and more than the combined unit sales of its nearest three rivals — Canon, Epson and Samsung — combined.

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