July 12, 2005

New Inkjet Technology from HP

The Palo Alto computing and printing giant introduced four new printers based on the new technology, including a photo printer that can print a 4 x 6-inch color photo in 14 seconds, priced at $199. Separately, HP said its Snapfish online photo service formed an alliance with drug retailer Walgreens.

Source: MercuryNews.com

``I think it's going to change the game,'' said Vyomesh Joshi, executive vice president at HP, who heads the imaging and printing group, HP's most profitable business. ``We will continue to drive this ink-jet Moore's Law into the future.''

Moore's Law refers to the pace of computer chips' increasing capacity that leads to faster computing. Clearly, HP hopes to apply the same principle to printers.

Ink-jet printers use many printer nozzles in a single print-head to deliver the ink. Like computer chips, which cram millions of transistors on a single chip, with more printer nozzles on a print-head, the faster the printer. More nozzles also allow more dots of ink on a given space, improving resolution.

New markets

Joshi said that HP has been working on its new technology, which it calls ``scalable'' printing, for the past five years. HP has spent about $1.4 billion on improving the manufacturing of its new technology, including a complete new design of its print-heads and an improved assembly. HP does its printer development in San Diego, and manufactures its print-heads in Corvallis, Ore.

The new printers are targeted to high-volume consumers and small-to medium-size offices. Eventually HP hopes to target new markets such as industrial or professional printers.

On Monday HP also introduced a color printer for small to medium businesses, called the Officejet Pro K550 Color Printer, which will deliver twice the print speed at half the purchase price of competitive color laser printers. That printer will be available in the fall.

With the new printer technology, HP now manufactures the entire print-head on one chip. Previously, HP manufactured the bulk of the print-head and the nozzle plate separately, and then assembled the whole print-head together.

``By creating the print-head . . . from one piece of silicon and decoupling it from ink cartridges, HP can vary the density/swath of nozzles to address everything from low-end consumers to high-end enterprise,'' said Joel Wagonfeld, an analyst with First Albany, in a note to clients.

HP also said it invested in some new materials for the printer heads and nozzles, which it declined to identify for competitive reasons. The print-head developed for the new consumer photo printer, for example, has 3,900 nozzles, compared with 1,200 nozzles in existing HP printers.

HP will use this scalable printing architecture across its highest-volume printers. By using the same technology in all its high-volume printers, HP will save in manufacturing costs.

Reduced costs

``It will reduce development costs by 50 percent and the time to market significantly,'' Joshi said. HP will also be able to address new printer markets. Cindy Shaw, an analyst with Moors & Cabot in San Francisco, said HP's new products should boost its earnings starting in the middle of next year.

``There has been a great deal of investor concern lately about increasing competition in the printing industry, which drives about two-thirds of HP's profit,'' Shaw wrote in a report to clients. ``Based on today's announcement, we are more positive about HP's ability to profitably gain share.''

Gartner, the market research firm, reported that HP lost share of the U.S. ink jet market in the first quarter of this year, when its share fell to 35 percent, down from 47 percent previously. HP has seen increased competition from Canon, Lexmark and Dell's entry into the printing business.

Separately, HP said its Snapfish online photo service formed an alliance with drug retailer Walgreens. Walgreens customers can order their digital photos online through Walgreens Web site and pick up their photos at any participating Walgreens locations, starting in September.

Posted by keefner at July 12, 2005 02:23 PM