HP’s ILLICIT HP’s ILLICIT PROFIT MOTIVE PROFIT MOTIVE HP’s Documents suggest the “smart chip” and HP’s Documents suggest the “smart chip” and SureSupply implementation were based on SureSupply implementation were based on the desire to increase ink sales. the desire to increase ink sales.
HP’s ILLICIT PROFIT MOTIVE. HP’s Documents suggest the “smart chip” and SureSupply implementation were based on the desire to increase ink sales. HP00058758. - PowerPoint PPT Presentation
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HP’s Documents suggest the “smart HP’s Documents suggest the “smart chip” and SureSupply implementation chip” and SureSupply implementation
were based on the desire to increase ink were based on the desire to increase ink sales.sales.
HP00058758
“Vendors sell consumer printers at cost, or even sometimes at a 20 percent loss, say financial analysts at Bear Stearns who track Epson and HP. But on the flip side, both firms earn a 60 percent gross margin on ink jet and toner cartridges, says Bill Hand, financial analyst with Bear Stearns.”
– Why Do Ink Cartridges Cost So Much? Tom Spring, 9/28/03
4.6 + 5.8 = 10.4 Cartridges Over Life of Printer
Speed of OrderingSpeed of Ordering
Nearly two-thirds of surveyed consumers Nearly two-thirds of surveyed consumers place an order immediately or shortly place an order immediately or shortly after they are alerted that a supply is low:after they are alerted that a supply is low:
32% 32% 31% 30% 27%
38%
5% 4% 7% 5% 4% 7%
28%32%
17%
0%
20%
40%
60%
80%
100%
Order with a few days ofreceiving alert
Order immediately Wait longer than a weekto order
Wait until cartridge runsout
It depends / Not sure
Total (n=100) Direct Connect (n=71) a Networked (n=29) b
HP00000738?
Amount OrderedAmount Ordered
Half of surveyed consumers buy what Half of surveyed consumers buy what SureSupply suggests or more.SureSupply suggests or more.
31%27%
41%
22% 21%24%
2% 1% 3%
45%
51%
31%
0%
20%
40%
60%
80%
100%
Buy exactly what SureSupplysuggests
Buy more than suggested tostock up
Buy less than suggested It depends / Not sure
Total (n=100) Direct Connect (n=71) a Networked (n=29) b HP00000738?
DAMAGE MODELDAMAGE MODEL
Damage ModelDamage Model
Per HP’s Mediation BriefPer HP’s Mediation Brief 2 Million Subject Printers2 Million Subject Printers
3% of total inkjet 3% of total inkjet printersprinters
10.4 Cartridges over 10.4 Cartridges over printer lifeprinter life
20.8 Million Subject 20.8 Million Subject CartridgesCartridges
$16.8 Average Profit per $16.8 Average Profit per CartridgeCartridge