Issue #0431/1 - A continuing slide in exchange rate against the Euro since the early part of August has caused Hewlett-Packard to raise prices on many of its supplies products in the UK. This follows only a month after the company further reduced its prices, by a couple of percent, for the fourth time in seven months following several months of relative stability on the money markets. The continuing stability of the Euro against the US Dollar means that the majority of prices across the rest of Europe are unchanged.
For those 84% of inkjet products that have suffered the increase, prices have risen by amounts from a little under 2% to just over 6%.
Changes are not consistent, though. Apart from the range of changes stated, some products have not been increased at all, meaning that the average change on inkjet products is 2.9%.
Similarly, price increases are applied on 99% of toner products, generally ranging from a little under 2% to more than 10%. In this instance though, the variation on price adjustments include a few prices that have actually been lowered – by up to 3.8%. Here, on average, the increase in prices is 2.8%.
This implies that exchange rate variations are not the only dynamic at play here. Hewlett-Packard has clearly been making some strategic pricing decisions with consumables products (see also - "Wide range of new Hewlett-Packard consumer inkjet products to be available by Christmas"), otherwise the range of adjustments would be much more consistent. This situation provides an opportunity for a manufacturer to maximise revenue from particular products that are most popular in the market.
Prices for popularcartridges are raised most.
For instance, prices for the immensely popular No. 57 and 58 colour and photo cartridges for recent DeskJet, PhotoSmart and PSC products have been raised by 4% and 5.3% respectively, and the No. 23 colour cartridge has been increased by 5.9%, while pricing on many older cartridges, like those for the DeskJet 1200, 1600 and 600 series, have not been changed at all. There are also no changes on the cartridges for the brand new generation printers discussed in last week’s TCPglobal – No. 13X and 33X/34X series cartridges. These products need to establish themselves on the market and it would be inappropriate to raise prices so early in life.
Where toner cartridges are concerned, it also is interesting to note that the cartridges for some of the highest-selling laser printers, such as the LaserJet 4100, are the ones that have attracted the highest price increases – 10.4% on the LJ4100.
CPP on LaserJet 1010/12/15falls as toner price is reduced,
against the trend, by 3.8%
Thinking of the average price increases, 2.8%/2.9% in each of the two sectors, we see that the reduction in value of the UK Pound against the Euro between the high values during the last week of July/first week of August and the middle two weeks of September (when Hewlett-Packard would have been making pricing decisions) was exactly that 2.9%. Whether this is, in itself, significant is probably a matter for debate.
Biggest of all are reductions on the high-end colour MFP, the HP Color 9850mfp, a 50ppm colour multifunction device that benefits from price reductions of 22% on the mono toner and more than 28% on the colour toners.
Also applying to media products, price increases on media are at similar levels to the majority of products – mostly between 2% and 5%.
Of the other US printer manufacturers: to date Lexmark has not pushed prices in the UK up; while Xerox raised many UK prices in July. The last price adjustments from Lexmark were in May when the company reversed much of the benefit it had handed out to users the previous month.
If the UK/Euro exchange rate continues to fall, then it is highly likely that both Lexmark and Xerox will impose more price increases in the very near future, as recent adjustments from both companies were based rather tenuously on minimal exchange rate movements.
Customers across the Euro-zone, however, should be safe from increases as the Euro continues to strengthen gently against the Dollar, again underlining the feeling that Xerox’s July adjustments were premature.
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