H-P Looks Beyond Ink Sales for Growth

For years, technology giant Hewlett-Packard Co. has relied on its huge imaging-and-printing business to power profits. Now, the Palo Alto, Calif., company has decided that the golden goose -- which produces roughly $24 billion of H-P's $80 billion in annual sales -- needs a makeover.

The unit perfected a razor-and-blades business model selling printers near cost, then reaping profits from the sale of replacement ink and toner cartridges. As recently as 2001, all of H-P's profit came from ink and toner sales. Today, ink and toner still generate more than two-thirds of earnings.

Source: WSJ


Posted: Wed - June 22, 2005 at 01:05 PM