HP Inks New Standards in Consumer Photo Printing

by Amber Shore
Imaging Industry Analyst

On Friday, August 27, HP launched an impressive digital entertainment product line that is expected to dominate sales this holiday season. The company's new lineup includes TVs, an entertainment hub, and the HP iPod for Apple, to name a few. The new product offerings signify trends of the times: all tech-savvy and sophisticated products geared toward the formative 12-34 year old demographic. However, to printer analysts everywhere, one aspect of the launch clearly overshadowed the ability to print tattooed casings for the new iPod and that was the announcement of Vivera, HP's first generation of branded inks. With Vivera, HP has not only hit the $0.29 per print sweet spot for printing borderless 4"x6" photos, but the company has set a new standard in terms of cost per print (CPP) and longevity that competing manufacturers including Canon, Dell, Epson, and Lexmark must immediately respond to in order to remain competitive.

Vivera: Cost, Control, Convenience

Analysts patiently (and some not so patiently) waited for HP to launch a CPP as competitive as Epson. The Japanese manufacturer surprised the industry with its February 2004 announcement of the PictureMate and its coveted $0.29 prints. Once details of HP's new DeskJet and PhotoSmart series printers began to leak in June and July, it seemed as though the company was focusing on faster print speeds, optional Bluetooth functionality with select models, and an expanded eight-color photo printer line as the upgrades to its crown jewels. Before Friday's launch, Vivera wasn't a household name like Epson's DURABrite or Canon's Think Tank, and it certainly wasn't something that could be found on a European Web site or in a Google search. As though to ensure HP would be the first to premiere its newest sensation, only cartridge numbers were available prior to Carly and VJ's unveiling.

Vivera inks allow consumers to print photos up to 40% faster than before, translating to speeds as fast as 60 seconds per print for the new dedicated 4"x6" inkjet photo PhotoSmart 325/375 models and 27 seconds for the eight-color PhotoSmart 8450. The ink system also touts up to 82 years of longevity with its three color system, and upwards of 115 years when printing in eight-color. But most impressive to the targeted consumer demographic, beyond speed and lasting photos, is the convenience of printing on-the-spot photos anytime, anywhere, for just $0.29.

HP now forces its competitors, including Dell, to address a new breed of consumers demanding immediate gratification for retail quality prints whether on-the-go or at a housewarming party. However, even though Vivera answers consumer requirements for at-home printing, the question remains if consumers will trust the ease of use of at-home printing, or continue to push into retail and online photo sharing sites.

The Photo Marketing Association recently announced that home photo printing today comprises a healthy 67% of all digital photos printed, but this marks a 13% decrease from one year ago. Furthermore, there is a staggering 82 billion images expected to be printed and shared by 2008. Such consumer acceptance has created a boom in retail digital photo printing locations and constant price cutting of retail CPP. Wal-Mart was recently spotted offering $0.17 prints, and retailers everywhere have launched online photo processing with in-store pick up. HP and its competitors must focus marketing efforts on those consumers controlling the digital revolution: the under-30 crowd.

In order for HP to tackle its evolving customer base and the exploding retail photo printing market, the company has refocused its marketing efforts from simply addressing ease of connectivity between HP products to the entertainment value provided by digital imaging. HP's target demographic cares about ease of use, cost, portability, and longevity, and HP has addressed these issues through its Vivera inks. While positive that the new PhotoSmart 300 series will enjoy shelf presence at all major consumer electronics retailers, it is also imperative for the company to shelf its new models at discount retailers such as Wal-Mart and Target, where younger and more frugal shoppers can be introduced to the printers in a mainstream retail environment.

But what can competing manufacturers such as Canon and Epson do to offset the publicity HP will enjoy with its new branded ink? Epson, recently extending its PictureMate offering beyond Best Buy, must help to mainstream scrapbooking by sponsoring more end-caps dedicated to this and other memory-saving hobbies. Canon, with more inkjet photo printers expected to launch in early September, must deliver $0.29 prints and continue to offer printer/camera bundles. And finally, Canon, Epson, and even Dell and Lexmark must each focus on competitive feature sets including speed, CPP, and longevity to appeal to those consumers revolutionizing the imaging space.

With retail digital photo pricing at an all-time low, digital camera sales at a high, and Epson's PictureMate being the lone inkjet printer daring to breach the price barrier, Friday's announcement came at just the right time for the consumer photo printing industry. Through Vivera, life returns to at home photo printing, and key partnerships with Apple and MTV will help fuel the target demographics acceptance by making digital imaging as cool and sophisticated as the photos they print.

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