Epson has quietly launched a new consumer printer marketing strategy in China that could have explosive ramifications for the rest of the printer market. For more than a decade, the printer industry has counted on a lucrative combination of low-cost hardware that draws in buyers and high-priced supplies that deliver some of the best margins of any business.
But cost-conscious Chinese consumers don’t like paying high prices for consumables. HP has responded with its Simple Black cartridges, which deliver inferior print quality for a lower price. Now Epson has gone one big step further and made low-cost cartridges the centrepiece of its Chinese consumer printer strategy.
If Epson’s strategy sells printers, competitors will have no choice but to respond in kind, and not just in China. Epson is deploying this strategy to other developing markets. This could start a consumables pricing nuclear war that melts the razor-and-blades model and incinerates the industry’s rich profit margins.
Research and Markets has announced the addition of the “Breaking the Model: Will Chinese Consumers Force Printer OEMs to Give Up Their Razors and Blades” report to their offering.
This report examines Epson’s reasons for deploying this strategy, the phased roll-out plan, international variations of the strategy, and the industry’s delayed realization. The report also examines HP’s and Canon’s positions on Epson’s strategy.