HP Focuses on Printing

Hewlett-Packard Co. (HPQ - Analyst Report) seems to be concentrating more on its printing business recently. In the recent PRINT 09 tradeshow, the company showcased its latest offerings in its Graphics Solutions Business. The company claims, this segment addresses the $115 billion potential global market opportunity for digital color printing. So this segment offers enough business opportunity for the company.
 
The company also highlighted technology, products and industry relationships in the Graphics Solutions Business like, HP T300 Color Inkjet Web Press, a 30 inch wide, color inkjet printing device and the new ColorPRO Technology, which is used in the HP T300 Color Inkjet Web Press and HP Designjet printers. The company declared the introduction of HP Indigo W7200 Digital Press, a liquid electrophotographic printing (LEP) solution for offset quality digital press printing.
 
Hewlett-Packard also disclosed a new alliance with the leading document management company, Pitney Bowes which will help to accelerate the HP T300 Press penetrate in the digital print and offset market. This apart, the company also introduced a new HP Graphics Solutions Partner Program, which is expected to increase the efficiency of the graphics solution workflow process.
 
Hewlett-Packard recently entered into a strategic agreement with Toshiba. As per the agreement, Toshiba will be able to sell HP’s laser jet product line to customers. This agreement expands and strengthens Toshiba’s overall product offering while also expanding the reach of HP products to more customers. This new partnership will prove beneficial to both dealers and customers, as the dealers will be able to avail of discounts, which will be transferred to the end customers. So Hewlett-Packard is trying to create a win-win situation for all the parties involved in its printing business.
 
Hewlett-Packard’s third quarter results were modestly above the Zack Consensus Estimate. The company provided a better-than-expected fourth quarter outlook. On the other hand, the company did not do well in its printing business, where revenues fell 19.6% year over year. Both ink supplies and hardware posted double-digit declines. We believe the segment has come under pressure due to strong competition from brands like Lexmark International Group (LXK - Analyst Report), Epson and Canon (CAJ - Analyst Report). Printer unit shipments decreased 23% in the recently concluded quarter, with both Consumer and Commercial printer hardware units down 16%. So we are witnessing a clear effort from the company to revive its printing business.

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