HP enters $24 billion photocopier mkt

LAS VEGAS: Hewlett-Packard Co. said it is entering the $24 billion copier market with high-volume copiers and services it says can cut costs by as much as 30 percent for customers' imaging and printing functions.

The moves by HP, which is already the largest maker of computer printers in the world, is aimed at taking a larger share of the overall market, and is the latest by HP's imaging and printing group to extend its lead into new markets.

By doing so, it is taking aim at entrenched copier makers Canon Inc, Ricoh Co. and Xerox Co., which have extensive relationships with and understanding of distribution channels. HP does not have that yet, which could mean making inroads will be a long, hard slog.

"These are entrenched competitors and have a large installed base," said Charlie Corr, an analyst with market research firm CAP Ventures, based in Norwell, Massachusetts. "I think the distribution issues are clearly a challenge for HP, it's a difficult task."

HP also said that they and privately held Subway Restaurants inked a deal under which HP will use its new printing and copier products to produce menus for the 2000 Subway franchisees and stores it has in Europe.

The old system was based on e-mail and paper, and would need to go through multiple checks and a laborious approval process, said Bill Schettini, chief marketing officer for Subway, in an interview.

"It was painful and it would take about three to six months, depending on how responsive people were," Schettini said, but working with HP has cut the time to as little as three weeks.

There are cost savings, too. To create a single menu panel above the counters in Subway restaurants cost $18 using the old system, but now costs $10, he said.

HP made the announcement at the computer show trade show Comdex in Las Vegas on Tuesday.

On average, Palo Alto, California-based HP said that companies spend more than $800 per employee running their copying and printing functions.

In addition, HP said that now corporate customers have a fragmented approach to creating content and distributing it, either internally or externally.

"What HP wants to do is unify it," said Vyomesh Joshi, who runs HP's Imaging and Printing Group, HP's largest and most profitable, in an interview.

HP aims to do that by rolling out high-volume copiers, as well as software and service offerings, which it also introduced on Tuesday.

The company also introduced digital pen and paper technology aimed at firms that use forms, such as insurance and health care businesses.

HP said that by using the pen and paper technology it speeds the processing and cuts the average cost from approximately 90 cents to 20 cents per form.