The Money Is in the Ink, Printer Makers Find

The U.S. is awash in a sea of red ink.

No, that’s not a campaign speech about the deficit. It’s the vision that Hewlett-Packard Co. and Canon Inc. have for the American home, although the two top printer makers include ample amounts of yellow, blue and black ink too.

After more than a year of aggressive price-cutting, HP and Canon find they can’t make as much money on each color printer as they used to. The solution? Persuade owners to buy specialty inks and papers that have higher profit margins than standard supplies. It’s like Gillette Co. recognizing that the profit is in the blades, not the razors themselves.

“No one makes money selling inkjet printers,� said Michael Weiss of MWA Consulting in Palo Alto. “To be successful, you have to sell a lot of ink.�

Canon and HP are touting new “photo� inks that offer more subtle shading than regular color ink, provided they’re used in the right printers and on the right paper. Canon also brought out a line of shimmering “neon� inks.

Printouts using the pricey new products look stunning, closer to the color of a good photograph than anything available on home machines. But will computer users swallow the greater expense--which can boost the price of a printed page to almost 50 cents, triple the cost of traditional printouts?

HP and Canon have set out to convince consumers in general and families in particular to change how they regard their printers. In their view, the printer is not just a piece of hardware but a platform that comes with all manner of software to inspire creativity.

“They want to make sure you’re using all that ink; that’s why they’re putting all that software in with the printer,� said Michael Zeis, who follows the printer business for Blackstone Research Associates in Uxbridge, Mass.

*

The buzzword is “projects�--from calendars with family photos to homemade greeting cards to banners and posters.

“Personal photos are one of the best ways to personalize projects,� said Michelle Hamilton, home printer product manager at Hewlett-Packard.

To nurture such projects, HP’s new 693C ($349) printer comes with the “101 Dalmations Print Studio,� a CD-ROM from Disney Interactive, and the PrintPaks Family Fun Kit, which includes materials to make banners, window art and refrigerator magnets.

“Families want that photo quality for greeting cards, or to send an instant, on-demand photo of a baby,� said David Ayres, senior manager for supplies and accessories at Canon. “People also want it for small businesses, like a real-estate broker putting a picture of a house into a listing.�

With its new line of printers (BJC-240, $179; BJC-4200, $279; BJC-4550, $499), Canon includes Canon Creative 2 software, with programs for making greeting cards, stationery, comic books and T-shirt designs.

*

How much more must consumers shell out for the specialty inks and papers?

Most people use standard photocopying paper that costs $7 to $8 for 500 sheets, or about 1.5 cents per sheet. HP’s photo paper costs $11.95 for 20 sheets, or 60 cents a sheet, though you can print on both sides.

Canon’s high-resolution paper for use with photographic ink costs $28.95 for 200 sheets, or 14.5 cents a sheet. Canon estimates that using the special photo inks and paper will cost consumers 41 to 47 cents a page, about three times what standard color printing costs. HP says it has not calculated per-page estimates.

“The cost per page may be a shock to consumers,� said Weiss of MWA Consulting.

Let’s say you want to create a calendar, using a different photo for each month.

Using HP’s photo paper, one copy of a 12-page calendar would cost $7.20 for the paper alone. Try multiplying that by grandparents, aunts, uncles and your dozen closest cousins.

To hold down the cost, HP and Canon emphasize that consumers can make all the rough drafts of their projects using standard paper and inks, then switch to the premium goods for the final product.

Think about how this will play out in your home:

You sit down at the computer, one child in your lap and another leaning against you, to create a holiday card for Grandpa. You “paste in� a picture of the kids that you scanned in or grabbed from a photo CD. You add text and make a printout or two until it looks just right. Then you shunt the kids aside, open up the printer, remove the standard ink cartridge, prop it on a shelf or desktop, snap in the special ink, close the printer, remove the standard paper, put in the special paper and print the final draft.

Is this fun?

Then you do the same in reverse to go back to regular inks. Or maybe you don’t. That could be the printer companies’ secret plan--guessing that people will weary of swapping papers and inks in and out and just leave the more expensive supplies in all the time.