Arik Hesseldahl

Recent Posts by Arik Hesseldahl

A Hint at Changes Coming to HP’s Printing Business

Start up a conversation about the recent troubles at Hewlett-Packard with anyone who doesn’t follow the tech industry closely and, at least in my experience, the first question that comes up is about printers.

Despite being one of the biggest overall technology companies by revenue and also the world’s biggest supplier of personal computers, one way or the other, HP’s brand image is inextricably tied to printing. And printing — of photos and of text — is something the conventional wisdom says that people and companies are doing less often. Indeed, sales in HP’s Imaging and Printing Group — recently combined with the personal systems group into a new Printing and Personal Systems Group — fell by 7 percent to just south of $6.3 billion in HP’s most recent quarter.

That combined operation is headed by Todd Bradley, who has been running HP’s personal computing business since 2005. In an interview with AllThingsD today at an HP event in Las Vegas, Bradley talked about a lot of things, but I was more curious about his observations on the printing business basically because it’s the newest thing in his managerial portfolio.

Logically, PCs and printers fit together and should be sold together, whether to consumers or to businesses, and yet for years HP has treated them as different lines of business. Now that they’re combined, Bradley says he expects to see some new operational efficiencies, both in how HP printers are marketed around the world and in how they’re manufactured.

First and foremost, Bradley says, the conventional wisdom on printing is wrong. “If you look at any data, printed pages continue to go up by about 2 percent a year, so people are still printing. And as a business requirement it continues to grow. It’s incumbent on us to make HP printers more relevant, and that’s why you’re going to see us taking such an aggressive market position and media position.” Watch for some heavy marketing from HP when it launches a new round of seven multifunction printers in the fall, he said.

Another thing that may change is the accepted old model of selling printers at a loss in hopes of making profits back on ink and toner and paper. Long the secret of HP’s success in the printer business, this fundamental approach may be changing, though Bradley wouldn’t say exactly how. “There are parts of our product line where’s that’s true and we’re evaluating them very, very closely,” Bradley said. “There are some low-end printers that we do lose money on and then the question is do we sell enough ink, does the model hold up? We’re doing a lot of work on that right now. Stay tuned for some things we’re going to do globally about ink.”

The new PPSG will also benefit financially, Bradley says, from the consolidation. There are some cost savings to be found in combining certain operational aspects of the businesses, like their supply chains and logistics. “That and the consolidation of our two go-to-market channels for printers and PCs. There’s some big dollars and big opportunities for savings there,” Bradley says.

Here I brought up one my own odd little obsessions: SKU reduction. In February, HP CEO Meg Whitman mentioned SKU reduction on an earnings conference call, which prompted me to write about how reducing the number and variations of products can help a company by simplifying its approach to the marketplace, and how the most visible example of that in recent memory was Apple in the 1990s.

I asked Bradley if it stands to reason that HP might benefit from trimming back on the number of SKUs it produces in its PC business, but also in printing, and he agreed. “I think you have to dial back to the work we did in the Personal Systems Group in June where we moved away from the historic consumer commercial model and switched instead to a model that focuses on value and volume. It allows us to better compete,” he says.

In the PC business, HP spent some time researching which models were best targeted at various groups of consumers. Bradley says a similar process will happen in printing. “Now we have consumer segments lined up against products and we’re using insights from that to drive the simplification. And we’ll do something similar with the printer business,” both with printers and with ink and toner, Bradley says. “There’s a lot of overlap there.”

Latest Video

View all videos »

Search »

Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus