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HP 2016 Global Partner Conference Boston | Chapter 2 | Our comment

Chapter 1 to read here.


IDeAs Comment

The initiatives announced by HP at the GPC represent a significant step on the long-anticipated path to rationalisation and consolidation of the printer industry. Following the move to digital technology, more than 20 years ago, and the more recent emergence of Managed Print Services, the A4 ‘printer’ market and A3 ‘copier’ market have been converging, to the point where the distinction between them has become largely a matter of historical legacy.

With these announcements, HP looks set to break down the last remaining barriers to its offering a complete range of solutions and services for all print needs, at least in the general office.

However, this is not the first time HP has tried to do this. They have had false starts with the ‘Mopier’, and more recently with the ill-fated Edgeline platform. Both these attempts failed, partly because the technology was not fully mature, and did not provide a competitive range of products to meet all customer needs, but also, importantly, because HP did not fully understand the A3 market, and did not develop an effective GoToMarket approach.


HP’s opportunity is to be the industry consolidator

HP executives conceded privately that they cannot afford another failure. The new set of products and support programmes appears much more complete and better thought-through, and accordingly, its chances of success should be higher. They certainly need to be, as HP Inc’s recent results have been uninspiring, to say the least.  This is a tough market, with office print volumes now clearly declining, and still too many competitors chasing a shrinking revenue opportunity. HP stated in their recent quarterly results announcement that they expect printer supplies revenue, which is their key driver of profitability, to continue declining in constant currency terms through the end of 2017, and only to start growing from 2018 onwards.

HP’s opportunity is to be the industry consolidator, and by taking over Samsung’s printer business, the have taken the first step on that road. However, HP’s ‘copier manufacturer’ competitors remain a considerable force to be reckoned with, and they cannot afford to and clearly will not easily give up their market to HP. It will be interesting to see how they respond. Canon will be particularly interesting to watch, as they remain a key partner for HP in the A4 printer market, but HP will now become a major competitor for them in their core A3 market.


We believe the key factor determining HP’s success will be their ability to get the GoToMarket strategy right this time.

If we are picky, one criticism of HP’s new product range could be that it stops at 60ppm, and does not include high volume/light production devices. Although these are not required in the general office for many customers, they can be important for larger enterprise clients, and for mid-sized customers in some key document intensive verticals – e.g. law firms. Copier manufacturers may take advantage of this gap in HP’s range, to make a proposition to these customers that they can meet their full range of requirements with a single vendor solution, whereas HP cannot. HP may counter that they still have the Sharp-manufactured S900 range, but they do not appear to have marketed these devices very successfully, at least so far.

However, we believe the key factor determining HP’s success will be their ability to get the GoToMarket strategy right this time. This will mean really understanding how the ‘copier’ vendors work, including their business model and cost structure, selecting and persuading the right partners to work with them, and making sure they can deliver a truly competitive offering, to the point where HP becomes their first choice as lead brand.

This article has focused on the A3 print announcements, as that is our core area of interest.
However, we should mention that HP Inc. also made significant announcements on personal systems, laying down a real challenge to Apple in particular, and of course are now launching their first 3D printers, with the exciting Jet Fusion technology. If that lives up to its promise, the potential new revenue stream could dwarf anything which may be achieved with A3 printers.


An interesting question for our print community is whether there will be a significant role for existing HP channel partners in the new 3D world.



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This article was written on 20 Sep 2016, and is filled under Event, Point of View.


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