HP: Think Ink

It’s no great secret that printer ink costs an arm and a leg. I read a few months ago that it costs more than vintage champagne (and doesn’t even taste as good). So a story hit the web this morning that a man from Boston has filed a class-action suit against HP and Staples, accusing them of colluding to inflate the price of printer ink cartridges. HP is alleged to have paid Staples $100 million to stop selling inexpensive third-party ink cartridges.

The price of ink for HP printers can be in the region of $8000 per gallon. At prices like that, HP’s profits some years are probably all due to ink. HP and other printer companies are desperate to stop alternative cheap ink supplies – and to be honest I don’t blame them. The whole business model here is to sell you a printer at way below cost and make profits from the ink. The upshot is that you, the customer, are incentivized to be frugal with your printing and thus save forests of trees that otherwise would be pulp. It’s a very green business model.

When it comes to a printer user like me, it’s not HP that is gouging me, it’s me that is gouging HP. About a year ago, I bought an HP printer/scanner/photocopier/fax/dishwasher or something with that kind of spec, for er.. maybe 25 cents and a gift voucher (I can’t remember, I only know it was cheap). My scanner had given out and I wanted a new one. I didn’t need the printer and it still has its original cartridge, as does another HP wireless printer that I bought for almost nothing and which I am ready to use when my actual printer, a 4 year old HP Deskjet finishes its second cartridge of ink.

If HP had another million customers like me, they’d be out of business.

Basic Mobile

While I don’t mind paying (i.e. not paying) printer ink prices, I do mind paying mobile phone charges. The mobile companies dream up absurd schemes for confusing the consumer into spending half their income on mobile phones. Here’s how they do it:

1. Plan A: Here’s a nice new mobile phone. There’s a fixed monthly charge, but you can have 1000 free special minutes with 500 free weekend minutes and 200 free texts, 50% of which roll-over unless they’re used on your buddies list, which then reduces to 25% rollover and, while you’re not watching, we’ll kill you with roaming charges, which only apply if you ever move from where you’re sitting right now to anywhere else.
2. Plan B: I have a gun. Open up your bank account and give me everything that’s in it. Here, take this mobile phone as a souvenir of our time together.

Well in Europe there’s a new kid on the block called Base which provides just a basic plan which in Germany, for example, consists of:

1. Buy your own phone (or use the one or two you’ve already got).
2. For $108 a month, you can make any number of free calls you want within Germany. Hell, just dial the speaking clock and leave the line open for the whole month, if you want.

That’s it; no buddies lists or special deals or rollovers or ring-tone discounts. Base is now stealing market share from other players in crowded markets. It’s about to open up in Spain. When they open up in the US, I’ll switch.

Laptops Rule OK

Most people (including me) would assume that PC sales in the developing economies would primarily involve desktops. No so. Worldwide, laptop/portable PC shipment growth grew 33.8% in 2007 (up from 26.3%) with growth in India, for example, being a remarkable 99% (according to Gartner).

The growth in laptop sales is connected to two phenomena:

1. The availability of wireless connections. (In many developing countries land lines are rare but wireless connection is common).
2. Cheap laptops, particularly the OLPC laptop ($188), Intel’s Classmate PC ($225) and Asus’ EEE PC ($247).

The popularity of cheap laptop PCs is creating a significant market footprint for Linux. I doubt whether Microsoft will be able to stop this trend, but I’m sure it’ll try.