Vendor Lock-In Is A Good Thing? HP's CFO Thinks So
Arthur T Knackerbracket has processed the following story:
HP is squeezing more margin out of print customers, the result of a multi-year strategy to convert unprofitable business into something more lucrative, and says its subscription model is "locking" in people.
[...] "We absolutely see when you move a customer from that pure transactional model ... whether it's Instant Ink, plus adding on that paper, we sort of see a 20 percent uplift on the value of that customer because you're locking that person, committing to a longer-term relationship."
[...] By pre-pandemic 2019, HP had grown weary of third-party cartridge makers stealing its supplies business. It pledged to charge more upfront for certain printer hardware ("rebalance the system profitability, capturing more profit upfront").
HP also set in motion new subscriptions, and launched Smart Tank hardware filled with a pre-defined amount of ink/toner. These now account for 60 percent of total shipments.
Myers told the UBS Conference she was "really proud" that HP could "raise the range on our print margins" based on "bold moves and shifting models."
[...] An old industry factoid from 2003 was that HP ink cost seven times more than a bottle of 1985 Dom Perignon. HP isn't alone in these sorts of comparisons - Epson was called out by Which? a couple years back.
Something tells us that Myers' audience at the UBS gig might not view the cost of printing the same way as the rest of us.
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