Printer ink: Tired of feeding the cash cow?

Inkjet refills typically cost significantly more than the printer itself.

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Ironically, by getting out of the business MSE was also reacting to a trend toward lower cartridge prices, as more machines have the print head built into the body rather than in the cartridge, Goldberg added. (A Hewlett-Packard spokesman said that its cheapest cartridge with an integrated print head retails for about $15, while those without print heads start at about $10 and are usually found in more expensive printers.)

On the other hand, online third-party refill ink vendor Castle Ink of Greenlawn, NY, is still in the business. Spokesman Bill Elward acknowledges that quality is a challenge, and that there are refillers who skate over the issue, giving the others a bad name. His firm has gone through four suppliers since 2005 looking for low defect rates, he says.

"The average cartridge can be refilled at most six times, but for quality control the best practice is to not refill more than three times," Elward notes. "But there are refillers who push it to the limit."

There are also third-party vendors that make their own copycat cartridges, risking patent infringement lawsuits. Goldberg explains that sticking to empty OEM cartridges is legally safe due to the principal of patent exhaustion, which says that after the OEM has sold its patented product the subsequent owners can do whatever they please with it. Elward notes that his firm sticks to OEM cartridges, but, since the supply depends on empties getting collected, various print-cartridge models often go in and out of stock.

Printer refills

Meanwhile, Goldberg also notes that some manufacturers put chips on some of their cartridges to identify them to the printer -- and to prevent the machine from using third-party cartridges that lack the chip. Refillers often find workarounds, but the process may take two years, he says. By that time, a printer manufacturer may have upgraded its models and the cartridges needed for it.

Phoenix Ink of Sarasota, Fla., represents a different approach: It supplies stores with ink-refill kiosks. Customers bring in their own empty cartridges for refilling, generally spending half what they would spend for a new cartridge, says the firm's president, David Scanlan.

"Used cartridges are a commodity and everyone is after them, so the prices fluctuate dramatically," he notes. Phoenix Ink gets its ink from Kodak, and is able to service about 200 different cartridge models with nine different inks, he adds.

As for color matching, most "people don't care about that, and anyway if I put our samples in front of you alongside the OEM samples, I would be surprised if you could say which was which," says Scanlan.

Clouded future

But as it turns out, defending ink prices is not the biggest problem facing the OEMs -- it's that the market for inexpensive inkjet printers isn't growing, apparently because those who buy them have less and less use for them.

"Photo printing in the home was a fad, and now they go to Wal-Mart for prints, or just upload their vacation photos to social media," notes Gartner's De Silva. "Then there were recipes from the Internet, and maps, but those moved over to smartphones and tablets. More and more material is being produced specifically for the Internet and is not suitable for printing. The inkjet market is still large, but is not growing," he adds.

In response, the major vendors are mostly moving to more sophisticated machines that would appeal to businesses, offering Internet-connected units that can print images sent to them from mobile devices, De Silva says. They also have processors that run apps that connect to cloud services, and run various kinds of document-related software -- and have ink tanks instead of cartridges, he adds.

And while laser printers typically cost more -- although prices continue falling -- lasers offer something that inkjets can't compete with: printouts with a crisp sheen, thanks to the heated roller used in the laser process.

"There is the perception that if I am printing a business proposal I want it to shine," says Industry Analysts' Slawetsky. "They feel that a laser is a more business-class machine, and having laser output shows that I am with a real company with a real printer. But photos come off better from an inkjet, and today's office inkjets give better results than the photo inkjets of just a few years ago. There's room for both." (Sources also agree that the best per-page cost can usually be had with a small, low-end monochrome laser printer.)

But don't expect the manufacturers to shore up their market by cutting ink prices. "That boat left the dock many years ago," De Silva says.

Lamont Wood is a freelance writer in San Antonio.

Copyright © 2012 IDG Communications, Inc.

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