Counting the cost

Do printer manufacturers see consumables as a licence to print money, or do these products offer good value? The recent introduction of a standard for black and white laser printers has put the issue back under the spotlight.

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By  Peter Branton Published  August 1, 2004

Introduction|~||~||~|When deciding to buy any product, cost is usually one of the first things on peoples minds. But what would you do if the product you were about to buy for one price could cost you as much as ten times again to run it, with no accurate way of comparing that running cost with another, competing, product? Well, for one thing, you'd probably be buying a printer. When we invest in buying a new notebook or a desktop, we look carefully at the specs: what processor does it have, what type of graphics card, how much memory, disk space and so on. Companies that invest in server networks can get detailed reports from analyst firms about the total cost of ownership (TCO) of competing operating systems. But buying a printer can open the buyer up to enormous hidden costs, yet its very hard to work out just how much they will be. Its not hard to work out where these hidden costs are: anyone who's had to buy a replacement cartridge for an inkjet printer for instance will have a good idea. A laser printer is generally seen as providing cheaper running costs than its inky cousin but it still gets through consumables such as toner, drum units, and other replacement parts, and that's not to mention the cost of paper and electricity. And what do you do if your new printer breaks down? Industry estimates suggest that the purchase price of a printer can be as low as just five per cent of the TCO for a business customer, with operating costs and maintenance and support taking up a far greater proportion of the budget. For the home or occasional user, then obviously running costs will be far less, but you still have the problem of how to evaluate just what those costs will be. ||**||Setting standards|~||~||~|Until recently, printer manufacturers have generally used different methods to calculate running costs, leaving customers largely in the dark about which models are likely to prove more economical in the long run. Unsurprisingly, this has attracted considerable criticism from public and private consumer watchdogs, not to mention customers themselves. For instance, in the UK, government body the Office of Fair Trading in 2002 called for uniform standards to be developed for the inkjet market. "Price transparency and printing performance details are essential if consumers are to assess the ongoing costs of an inkjet printer," the OFT claimed, going on to recommend a test standard for measuring the performance of inkjet cartridges, so that consumers could compare models from different manufacturers more objectively. Faced with this growing criticism, and keen to justify the cost of consumables, a number of leading printer makers have recently rallied behind a new benchmark developed with industry body, the Industry Standard Association (ISO). The laser printer toner cartridge yield standard allows users to measure print yields more accurately, by defining the key attributes that affect yield, so that all manufacturers can utilise the same methodology in future. So far, HP, Canon, Epson and Lexmark have all signed up to the initiative, and the ISO claims it is also working with other printer makers. The ISO has worked hard to make the testing as rigorous as possible. For instance, at least nine separate cartridges are tested on a minimum of three separate printers, to allow for variations in hardware. And rather than just taking an average yield, the ISO says it will use a "robust statistical method" to calculate a more accurate result. While the new standard is only for black and white laser printers, all the vendors have given their backing for it to be extended to colour lasers, and for similar standards to be implemented for inkjets as well. However, these standards aren't expected to be completed until late 2005. ||**||Different measures|~||~||~|Also, while broadly welcomed, industry figures have pointed out that the new ISO standard is limited as it only measures yield, that is the number of pages that can be turned out, not quality. "Yield is only one among many factors in the overall costs of printing," said Pradeep Jotwani, senior vice president, HP Imaging and Printing Group, in a statement announcing the new standard. "To get the best overall value, we advise our customers to consider reliability, productivity, quality, speed, and ease of use as well." Crucially, one thing the new standard does do is allow customers to compare yields from the printer manufacturer's own products to yields from remanufactured and refilled toner cartridges. While consumable products from third-parties are often much cheaper than those supplied by the manufacturers themselves, printer makers claim their own products offer better quality. "Once customers can compare like for like then it frees them up to look at the value added features we offer," says Scott Leach, regional sales manager for Epson Middle East. "A lot of these compatible products provide a much lower yield but with everybody using different measurements, then people haven't been able to compare properly." "Consumables are very definitely not a commodity, you can't just buy these from some stall in the market and expect to get the same quality," says HP spokesman Ibrahim. "We carry out rigorous testing on all our products to ensure the customer gets the right print quality." ||**||Research and development|~||~||~|Of course, so long as consumables cost so much, people will still look at sourcing them more cheaply. Manufacturers point to the massive investments they make in research and development to improve print quality, and the reduction in print costs, in "real terms", over the past few years. "We believe that is one perception," Leach replies, when questioned on the high cost of consumables compared to the cost of buying a printer. "In our view, that is because of the reduced price of entry level printers today. The fact is the cost of printing pages has reduced." While manufacturers hope that the drive for standards will help to differentiate their products from the third-party makers, a number of vendors have looked at other ways of stopping people from shopping elsewhere for consumables. In some cases, it can invalidate your warranty if you use unbranded products in consumables. Manufacturers will also claim that using refill or clone products can cause damage to your printer, and will certainly affect its output quality. Some manufacturers have also stopped people from using third-party ink cartridges by putting chips on their own cartridges, which need to be recognised by the printer for it to work. Epson faced threats of a consumer boycott in Europe last year, after complaints that some of its cartridges, which contained a chip which was designed to indicate when the cartridge was out of ink, could print up to 37% more pages by over-riding this. Epson has defended this seemingly-premature warning on the grounds that the inkjet technology requires the printhead is always wet, so to keep the device working properly, it requires there to always be ink left in the cartridge. Epson Middle East's Leach says that far from wanting to push up running costs, the company is constantly working on ways to reduce the customer's overall cost of printing. For instance, he says, the company is developing separate cartridges for different coloured inks so that customers only have to replace what they're using. Epson has also invested heavily in its Durabrite ink technology, which gives customers better results when using different papers, saving the cost of having to buy specialist printing paper. By simplifying the print drivers it is also easier for customers to change the dpi (dots per inch) resolution that the printer is capable of printing at, meaning that for jobs that require lower quality, the customer can save on ink. Certainly, the big printer manufacturers do make massive investments in research and development, and this is obviously going to impact the cost of their products. A telling point was made by Herbert Kock, general manager of HP's Imaging and Printing Group for International Sales Europe (the region which includes the Middle East) on a recent visit to Dubai. "Just to produce one new ink cartridge can cost up to half a billion dollars in research," he says. "We want to get our money back on that one." But wouldn't customers be generally happy with a lower, and cheaper, quality of printing? "I think nowadays, people expect great quality printing even at the low end," says Leach. "Even at entry-level we've seen that people want quality and Epson will not compromise on quality." In this region, counterfeiting is also an issue, with companies keen to work with governments to help them identify and crack down on counterfeit products. While any drive towards greater standards that benefit the customer should always be applauded, it seems likely that there will continue to be intense debate around the issue of printing costs, if only because there is so much money to be made in the selling of consumables. For the printer manufacturers to get theirs bought though, they will hope that the new standards will spell it out in black and white for customers as to which printer they will buy. ||**||

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