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Massive price reductions from Brother on two A3 inkjet AiOs slash (but not eliminate) Hewlett-Packard’s Total Cost of Printing advantage

Issue #1101 – Hardware price reductions (median price in Euros) of up to 61% have resulted in one Brother A3 MFC All-in-One (MFC-6890CDW) moving from 78% more expensive to buy than the Hewlett-Packard Officejet 7500A to being 32% LESS expensive. The result is an amazing, but brief, window of opportunity for low volume users.

Placing all three models at a price that is essentially identical, this is a great time for businesses to pick up the top-end model at a real knock-down price (less than the price of the model at the bottom end of the range) for as long as this pricing situation continues – giving them A3 printing, copying and scanning capability, together with A4 duplex printing, at a phenomenally low price, less than €200!

Median Purchase Price

A3 Business Inkjet AiO

Price reductions on this scale would normally suggest that Brother is preparing to replace these devices with new and more advanced hardware.

And … surprise, surprise, we find that Brother Germany has four new models of A3 inkjet AiO on its web site and Brother US has two new models. Clearly, these new models are available only in Germany at this point. However, they are scheduled as ‘coming soon’ in the US and other countries will, no doubt, follow in due course.

One of the models, MFC-5895CW is actually a refresh product within the existing range and does not have relevance to the new, forthcoming range.

Germany USA
MFC-5895CW (refresh only) &nbsp
MFC-J6910DW &nbsp

With these models being brand new to market, the pricing we see now may adjust itself over the coming months as the products bed in. So, we will just have to wait and see how the new models slot into the competitive Total Cost of Printing scenario in the fullness of time.

From what we can see right now though, the situation looks exceptionally good for Brother!! Having had the A3 market to itself for a couple of years, Brother looks to be targeting Cost of Printing quite strongly.

Indeed, history tells us that a new engine design is also highly likely to be used in an A4 variant. So, we should expect there to be significant implications to that market segment as well, sometime in the indeterminate future – with potential for competition with the Officejet Pro 8500 to hot up. Either way, Hewlett-Packard is playing catch-up in the A3 segment and will have to work hard to achieve a strong position against a Brother that has two years head start!

However, this article is about the reduced pricing on current models – so, more about pricing and Total Cost of Printing on the new models next week as more information becomes available.

Hewlett-Packard Officejet 7500A comparison
We have re-run the calculations and charts prepared for the recent articles about the launch of Hewlett-Packard’s new range of internet enabled All-in-Ones to show how this new pricing structure reflects on market positioning and the overall Total Cost of Printing.

Firstly, the price used for the Officejet 7500A in the original article, prepared in August 2010, was an assumption based on positioning of other Hewlett-Packard models surrounding the forthcoming A3 model. In fact, we find that the median price for this model researched this week falls within €2.50 of this initial estimate.

Brother MFC-6890CDWBrother MFC-6890CDW

In September, when the 7500A was launched, the Brother MFC-6890CDW was 78% more expensive to buy than the Officejet 7500A. This gave the Officejet a significant advantage over the Brother model in terms of the all-too-critical out-of-pocket, up front expenditure. Similarly, the MFC-6490CW cost 38% more than the Officejet 7500A.

Now, both of these models can be obtained at a cost around 32-36% lower than the Officejet 7500A, completely reversing the out-of-pocket advantage of the 7500A.

Slightly surprisingly, the model at the bottom end of the range, the MFC-5890CN, with its A4 scan platen, has actually risen slightly in price. The reason for this is likely to be that, being the least expensive to buy, it has been the most popular model in the range and that price reductions to clear the channel to make way for the new models is unnecessary.

Hewlett-Packard Officejet 7500AHewlett-Packard Officejet 7500A

Ongoing running costs are a different prospect, however. When the cost of supplies was taken into account in August, the Brother models fell between 11.5% (MFC-5890CN) and 26% (MFC-6890CDW) above the level of the Officejet 7500A.

Now, however, the reduction in hardware purchase pricing means that all three models fall just short of matching the Officejet 7500A for long term Total Cost of Printing – by around 11.5%.

Total Cost of Printing

A3 Business Inkjet AiO

Note that for this level of machine, the mixed mono/colour CPP over three years shown in the accompanying table is calculated on the basis of 1,000 pages per month; 70% pages in mono and 30% pages in colour; is based on the use of maximum capacity supplies; takes into account any standard, or starter, supplies shipped with the device; and also includes the cost of purchase. All prices are Median Street Price with tax, sourced in Germany.

In fact, prices on supplies have risen slightly over the last five months but that is true for both manufacturers, not just Brother, and, while Total Cost of Printing differential between the MFC-5890CN and Officejet 7500A remains at almost precisely the same level as it did five months ago, the other two models enjoy a much-reduced overall cost, thus cutting the differential with the Officejet considerably.

Unfortunately for Brother, and confirming the statements already made, it is very much the cost of consumables that sets the scene for the overall cost of running these A3 machines rather than the cost of hardware purchase.

As the chart below shows, the current very low cost of hardware purchase on the two upper-level Brother machines ensures that the Total Cost of Printing at the lower end of the page count scale, 500 pages per month, is extremely competitive with the Officejet 7500A. As page count increases though, the gap widens rapidly.

However, what this points to is that there is a narrow window of opportunity for low volume users with an A3 requirement to jump in with an A3 print/scan/copy purchase, and A4 duplex capability, at an unbeatable price that we’re unlikely to see matched for some while to come.

In fact, for very low volume users, at 250 pages per month the long-term TCP figure for the Brother MFC-6890CDW is actually 12.5% LOWER than the Officejet 7500A – and the other two models will cost slightly less again.

Total Cost of Printing

A3 Business Inkjet AiO

If the balance of mono to colour pages is reversed, to increase the proportion of colour pages printed, the gap does widen slightly at higher page volumes. The Brother models are that bit more expensive because of their higher supplies costs but at 250 pages per month, these devices are still less costly to own than the Officejet.

Total Cost of Printing

A3 Business Inkjet AiO

As indicated earlier, however, this situation will change dramatically with the new range from Brother – but, more of that next week!

To round off – and be repetitious – these price reductions present a marvellous opportunity for buyers but one that has a very short life-expectancy. As soon as these models sell out of the channel, that opportunity will have evaporated.

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