Yet HP is facing a significant problem in a key market: Printing. HP’s Imaging and Printing Group, or IPG, accounts for roughly 20 percent of HP’s revenue, making it a bigger business by revenue than the enterprise and server, storage and networking businesses.

As it does with most printer vendors, the business model of IPG works like this: HP sells a printer, more often than not at a loss, then makes up for the loss by selling the customer ink and other supplies over the next several years of the printer’s useful life.

In this business, HP is the king. In a survey of the state of the printing market issued last week, the market research firm IDC pegged HP’s overall share at north of 41 percent. In 2011, by IDC’s reckoning, HP sold more than twice the number of printers as its nearest rival Canon, and more than the combined unit sales of its nearest three rivals — Canon, Epson and Samsung.

So what’s the problem? The printing business is on the wane. For all of 2011, combined sales grew by 0.7 percent, according to IDC, and what little growth there was didn’t go to HP. IDC says HP’s printer shipments declined by 0.7 percent last year, while Canon, Samsung and Brother all saw their shipments grow.

And sales in key market geographies make the picture look even worse. In the U.S., for example, IDC says the market for printers in 2011 contracted by 9 percent, while HP’s unit sales plummeted by more than 12 percent. On a unit basis, IDC says, HP sold fewer than 4.2 million printers to U.S. customers, compared to 4.8 million in 2010.

Slowing hardware sales are only the leading edge of the problem. Remember that HP takes a loss on every printer it sells and makes it up on much more profitable supplies. Here’s where the numbers start to look scary: As overall revenue in the IPG was essentially flat year on year in 2011 — sales were $25.78 billion in 2011 versus $25.76 billion in 2010 — sales of supplies declined.

That may not seem important, until you realize that sales of supplies account for more than two-thirds of IPG’s revenue: Printer supplies are a $17 billion annual business that had been growing until 2011 when sales headed south. Sales of ink cartridges tend to track sales of new printers on a six- to nine-month lag, but there’s also a long tail that feeds into the existing installed base. Printers can stay in service for years, gobbling up ink.

A decline in ink sales can have an outsized impact in IPG’s profitability: Operating margins in IPG declined from 17.1 percent in 2010 to 15.4 percent in 2011.

And if market trends weren’t enough to drag down HP’s printer business, there are economic ones, too. Canon manufactures key parts of HP’s LaserJet printers in Japan. That caused two significant problems: Logistics costs increased as a result of the earthquake and tsunami that hit Japan last year. Meanwhile, the strength of the Japanese yen relative to the U.S. dollar is adding even more incremental costs.

The bottom line: Printing has been one of HP’s long-term strengths. If people are printing less, they’re buying fewer printers. And if they’re buying fewer printers, they’re buying less ink. All of it is bad news for the world’s biggest printer company. We’ll see just how bad on Wednesday, when HP reports its latest results.

Improbably, the tabloid’s news desk had reason to believe the 13-year-old girl—whose disappearance was then a big story in Britain—had run away from home and gotten a job at the Epson factory. The reason: The paper had a voice-mail message, apparently intercepted from her phone, suggesting she worked there.

The tabloid’s hope was that, “When Milly Dowler clocked off work, we would be there outside the gates,” said one journalist involved in the three-day stakeout, which hasn’t previously been reported. “We could say, ‘There you are, Milly, the whole world has been looking for you.’”

It turned out the girl wasn’t working at Epson. In September 2002, she was found murdered.

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These printers are also well-liked because of their ability to work independent of a computer: just plug in your digital camera’s USB cable or a memory card and press print. But because most of these printers have typically lacked good editing options, users were still returning to their computers to make adjustments on important images.

This week we tested three of the newest compact photo printers from HP, Epson and Canon that include features that make them more like mini-computers all their own, including extensive editing options and even internal memory and a CD burner in the HP and Epson, respectively.

But with these new features come higher prices. The $200 Canon Pixma mini260, $250 HP Photosmart A716 and $300 Epson PictureMate Flash cost significantly more than the mini-printers we reviewed almost two years ago. Back then, the most expensive of the three compact photo printers we tested was $200.

We’ve been printing directly from memory cards plugged into these three printers for the past week to see if their higher prices were delivering better results. Overall, we were impressed by the quality of the prints. We were also pleased, though not surprised, to find that the cost of paper and ink supplies has dropped about 10 cents per print, overall. The most inexpensive supply pack, from Epson, offers prints for 27 cents apiece, though this is still about 12 cents more than Kodak Gallery’s online store.

We printed photos taken with two different digital cameras, as well as photos captured on a cellphone’s 1.3-megapixel camera. Neither of the cameras was made by the makers of the printers.

We found the Epson’s prints to be the best overall, even though they cost the least. The Epson produced sharp images with rich, vibrant colors that churned out in just 45 seconds each, the fastest time of the three. And, though we had to do some in-printer editing to produce a red-eye-free image of a friend with the Epson, the final version of this photo also looked good. The Epson is larger and costlier than the others, but the company makes a less expensive, smaller model with the same picture-printing features and quality.

The HP more easily eliminated red-eye with its Photo Fix button, but its other prints looked somewhat less vivid than the Epson’s. And at a speed of two minutes per image, we grew tired of waiting for these prints. The Canon’s images looked sharp, but were slightly yellow in tone when lined up side-by-side with the other prints. They took about a minute each to print.

All three of these compact photo printers have built-in handles for portability, 2.5-inch viewing screens to preview images and optional sold-separately batteries for cordless use.

The $250 HP Photosmart A716 looks much like its predecessors: white and toaster-shaped with accessible memory card slots and a USB port on the front side. But this printer comes with four gigabytes of internal memory, enough to hold up to 4,000 pictures according to HP. We easily saved various images to the HP Photosmart’s memory by pressing a Save button on the printer’s top side.

One advantage to HP’s internal memory: at a party or family gathering, you wouldn’t have to rush to print out as many images as possible before people taking pictures left with their cameras or memory cards. Instead, you could just save the images onto the printer for later. For $70 less, HP sells the Photosmart A616 — the same printer without internal memory.

The HP Photosmart A716 really shines in the editing department, offering image improvement options that truly made a difference. But we weren’t able to easily view multiple photos at once on its screen — this view can only be seen by selecting Print Index View, which is buried four steps deep in a menu. In addition to 4×6 photos, you can also print 5x7s using the A716.

Epson’s $300 PictureMate Flash stands higher than the HP and Canon printers, partially due to the CD burner that is built into its base. This feature lets you copy digital photos onto CDs, which can then be handed out in addition to, or instead of, prints. You can also print an index of the images that are being copied onto the CD.

We quickly burned 50 digital shots from our SecureDigital memory card onto a CD; when slipped into our computer the CD’s images appeared, ready for editing, emailing or Web posting. Epson also sells its PictureMate Snap — the same printer without the burner — for $100 less.

The Epson PictureMate Flash has colorful buttons that are well labeled and easy to understand, including a smart Display button that easily switched our screen’s view from full-screen to thumbnail. At 6.6 pounds, this compact printer weighs in as the heaviest of the bunch.

When we pulled the $200 Canon Pixma mini260 out of its box, we wondered how it would transform into a printer. But after a few clever fold-backs and compartment openings, we were in business. This printer’s most useful button is a round navigational dial, like that used by Canon in its digital cameras. The mini260, like the Epson, easily switches from one image view to the next using a soft key below the viewing screen.

But even with the navigational dial, we found that using the Canon Pixma was more laborious than operating the other two. For one thing, inserting a memory card into its side slot didn’t trigger the printer to automatically pull up the images. We had to first open another menu to see our photos. And a screen filled with options like paper size, type and print quality had to be bypassed before each printout. The other printers smartly hide these settings deeper within their menus.

A host of editing options are offered in the Canon, but even with all of these settings turned on or adjusted for the best results, edited pictures still weren’t as good as those from the HP or Epson. The red-eye in one image, for example, wasn’t fully removed even after we turned on red-eye correction.

In the end, we liked the $300 Epson PictureMate Flash best. If its price tag makes you wince, try the $200 PictureMate Snap, which doesn’t include the CD burner. In our tests, the Epson produced the best prints for the least amount of money in the fastest time per photo. Consumers who are in the market for a portable photo printer won’t be disappointed by this new gadget.

Write to Walter S. Mossberg at walt.mossberg@wsj.com and Katherine Boehret at katie.boehret@wsj.com

So, most digital photos never get printed, and many of those that do are produced at kiosks in retail stores, and ordered from online photo services like Shutterfly and Kodak’s EasyShare Gallery. That’s bad news for Hewlett-Packard Co., the leader in home printers, which makes a lot of money selling ink and paper to consumers. Now, H-P has come up with a new printer design for homes that it hopes will entice consumers to do more of their own printing.

This week, my assistant Katie Boehret and I reviewed H-P’s speedy new $199 Photosmart 8250 Photo Printer, a product that the company hopes will change the way you think about printing photos at home. In its fastest mode, the company boasts, the 8250 can churn out a snapshot-sized 4×6 photo in just 14 seconds and all-black-print text pages at 32 per minute — much faster than its 20 color or black-print page-per-minute claims for older home inkjets. Our tests showed the new model to be very fast, but not quite as speedy as H-P’s claims imply.

In addition to its speed, the Photosmart 8250 also boasts a new type of water-fast ink and a new ink-cartridge system for home printers. Instead of lumping all of the printer’s colors together in one large cartridge, this printer stores each of its six inks in a separate cartridge. That way, if you use a lot of one color — say lots of green, taking pictures of baseball games — you only need to replace one color when you run out, not all of the others, which still may be in good supply.

These new cartridges cost about $10 for each of the five colors, and $18 for the solo black cartridge, which holds about twice as much ink as any one color. By contrast, on H-P’s older printers, the single color cartridge can cost as much as $35, and the black cartridge about $30.

The longevity of these new individual tanks varies per color and depending on what is being printed. H-P estimates that with typical pages of mixed text and graphics, the new black cartridge will print 480 pages, and color cartridges range between 350 and 490 pages. The cartridges in the old system last for 450 color and 450 black pages.

This idea of individual ink tanks is nothing new. Some H-P rivals, such as Epson and Canon, have relied on that type of design for years, and H-P itself has sold inkjets for business with individual ink tanks. But the company claims its new home system is engineered to use more of the ink inside each tank before it requires replacement, cutting down on waste.

To give us some perspective on H-P’s more traditional printer cartridges and speeds, we also tested the 8250′s year-old predecessor — the $149.99 Photosmart 8150 Photo Printer. The 8150 works with the old cartridge system — using just two larger cartridges at a time.

These two silver printers are similar in appearance — each is designed with a useful four-card media-card reader and a 2.5-inch color LCD screen centered on its top side. This combination of features makes both printers useable without attaching to a Mac or Windows PC; the LCD serves as a preview panel for images on your memory card, thus allowing you to zoom, lighten, or remove red eye in photos before printing.

But as we easily set up these two printers, we took note of how, under the hood, they appear rather different from one another. The older 8150′s two large cartridges have built-in printheads that slide from side to side during printing, then over to the right side for reloading and resting.

Under the 8250′s lid, we took a bit more time to snap each of its six cartridges into place. This rainbow of yellow, light and regular magenta, light and regular cyan and black cartridges fit smack in the center of the printer’s guts.

These cartridges differ from the older type in that they are separate from the printhead, the device that moves left to right while spitting color onto a page. Each container of color stays in place, and is connected to the moving printhead through its own tube. H-P says this system enables faster printing while also making it possible to replace just one color at a time.

Katie and I tested the 8250 for speed and quality by printing full-page color photos, 4×6 color photos, color Microsoft Word documents and black text-only Word documents. We sent documents to each printer from its corresponding computer, as well as directly from an inserted memory card. We ran the same tests on the 8150, just to get an understanding of how much faster the 8250 was, and how — if at all — the quality differed. Our results showed the 8250 to be much faster, but we couldn’t detect any quality difference. Both the old and new models produced very good, but unexceptional, prints.

Unsurprisingly, the 8250′s fastest results came from printing the color and black Word documents, each of which was finished in just 10 seconds, about 13 seconds faster than the 8150. Printing 4×6 color photos took 32 seconds on the 8250, about a minute less than on the 8150. And it took about eight more seconds to print a full-page photo on the 8250. The full-page photo on the 8150 took around four minutes.

H-P is selling new “Advanced” photo paper to use with its new ink. The company claims that the combination of paper and ink will lead to water-fast prints that dry faster, and that the new paper also contributes to faster print times, which we found to be true. We used a sheet of HP Premium Plus Photo Paper instead of the HP Advanced Photo Paper to print a 4×6 on the 8250, and it took 70 seconds, over twice as long.

H-P’s fastest result — the 14 second 4×6 photo — is achieved by printing on Advanced Photo Paper, in fast-draft mode with borders, and H-P times the print according to the second page out, after the printheads are already in place for printing. By contrast, our tests attempt to approximate real life. We start timing when the print button is pressed and count the first page out.

Occasionally, the 8250 performed some noisy “device maintenance,” according to the message on the LCD screen. H-P explained that this is the printer’s way of recycling the ink it uses to clean its printhead, whereas many printers clean printheads using ink, but never re-use that ink.

The individual ink cartridges might be enough to sway you into buying the 8250, especially if you print items with certain colors regularly — like documents with your company’s all-red logo. You might also be drawn to its speed, which had us hooked, but its quality, while good, wasn’t anything out of the ordinary.

With reporting by Katherine Boehret

Write to Walter S. Mossberg at mossberg@wsj.com