One of their own recent annual reports practically bragged about the amount of profit they make - from ink.
What's really horrifying is that it frequently makes more sense to buy an entire new laser-printer than to buy new ink. HP's gouging in the ink market will inevitably end in a price-fixing investigation.
One of their own recent annual reports practically bragged about the amount of profit they make - from ink.
There's nothing inherently wrong with bragging about profits. It's done here about every day when talking about Apple and what they've been able to wring from consumers. It's almost a badge of honor to say you're proud to have paid a premium for an Apple product. As another example B&N and Amazon probably aren't making much if any profit from selling Kindles and Nooks, but probably do well selling book and periodical consumption on those devices.
FWIW, HP isn't simply reselling drums of ink developed and mixed in some Asian factory. They've got quite an investment in ink technology over the years. IMO, their new latex inks are particularly impressive considering the excellent color gamuts, impressive outdoor durability and very low environmental impact.
I'm not suggesting they be included in PC numbers, I'm just saying that the new category isn't 'Media Tablet', it's TC. The last thing Apple wants is for iPad to become a synonym for tablet computer - that way lies the kind of genericization that destroys trademarks.
I understand what you were suggesting, that Apple needs to start calling them "TCs." I am simply suggesting that Apple is far better off establishing the benchmark for what this type computer can be, as they do now, instead of creating a new generic category in which they would need to compete. Apple doesn't do generic, but the companies building Android tablets do. A new generic category would only invite references to the PC-Mac dichotomy, which Apple has worked so hard to escape.
There's nothing inherently wrong with bragging about profits. It's done here about every day when talking about Apple and what they've been able to wring from consumers. It's almost a badge of honor to say you're proud to have paid a premium for an Apple product. As another example B&N and Amazon probably aren't making much if any profit from selling Kindles and Nooks, but probably do well selling book and periodical consumption on those devices.
FWIW, HP isn't simply reselling drums of ink developed and mixed in some Asian factory. They've got quite an investment in ink technology over the years. IMO, their new latex inks are particularly impressive considering the excellent color gamuts, impressive outdoor durability and very low environmental impact.
I think the point being not that "bragging about profits" is intrinsically bad, but that this particular style of profiteering-- selling devices at close to a loss to drive absurd markups for consumables-- is fairly loathsome.
Bottom line is that HP (and others) are charging something like $8,000 a gallon for ink, and have engaged in aggressive tactics to suppress third party solutions. When you make a lot of your money off of that kind of model, it doesn't really speak well for your organization. It would be as if Apple made some significant percentage of its overall profits by charging $1,000 for laptop batteries while selling laptops for $100 and while simultaneously making sure that third party batteries were either unavailable or didn't work. And that that was actually the standard way of doing business in the laptop market. Oh, and batteries only lasted 3 months.
I think the point being not that "bragging about profits" is intrinsically bad, but that this particular style of profiteering-- selling devices at close to a loss to drive absurd markups for consumables-- is fairly loathsome.
Bottom line is that HP (and others) are charging something like $8,000 a gallon for ink, and have engaged in aggressive tactics to suppress third party solutions. When you make a lot of your money off of that kind of model, it doesn't really speak well for your organization.
They're really only shifting the profit center from the hardware to the consumables. I have no doubt they sell more printers by selling close to cost, and thus drive more ink consumption as well. That model actually has advantages for some consumers and small businesses, who can pick up a quality printer at a low price even tho they're low-volume users.
HP's professional line is a bit different in their pricing strategy. They do try to drive some profit from both hardware and ink. The printers themselves start at around $15K, but ink sells for about $160 a liter.
They're really only shifting the profit center from the hardware to the consumables. I have no doubt they sell more printers by selling close to cost, and thus drive more ink consumption as well. That model actually has advantages for some consumers and small businesses, who can pick up a quality printer at a low price even tho they're low-volume users.
I don't have much problem with this tactic from a consumer's standpoint, but I think it stinks pretty badly from an environmental one. A few years ago I bought a Samsung color laser which I was prepared to pitch in the trash when the included toner cartridges ran out. It wasn't cheaper to buy a new printer, but it was darned close. I ended up selling the printer to a friend for next to nothing. He was willing to take a chance on remanufactured toner cartridges. Otherwise a nearly new printer ends up in landfill. Sad.
I think you hit the nail on the head. The consumer market is such a small piece of the pie, but it's where all the profit is. Businesses, corporation, governments... they don't care about anything but the upfront cost of the machine, and Apple will never win that battle against $250-$300 per unit Dells. The thing of that, though, is that if you don't also sell support and services along with the machine, there is no profit in that market.
The consumer market as best as I can resolve from the statistics comprises roughly half of unit sales (on average - some less than others) for these companies, except Acer and Apple. Acer and Apple are almost exclusively consumer/small business unit sales. Of the top unit sellers, HP, Dell, Lenovo and Toshiba all sell a mixed package of desktop, laptop, server, storage and services to corporate infrastructure purchasers. You can see the impact of this on Acer for example, where they took a 40% drop in their shipping outlook due to softening of the consumer netbook segment. HP et al, all depend on the corporate refresh cycles to harden their market shares against the consumer volatility in PCs.
All of these companies see consumer as an add-on to their corporate sales, not a primary source. Consumer PCs from these companies are also second tier, cheaper versions of the PCs they offer corporate customers. Also remember that corporate refresh stalled when Microsoft introduced Vista and saw the backlash from it's issues. With the patched up Vista/Win7 release and confirmation from corporate test labs that it was the real deal, stalled corporate purchasing was released and was able to drive the market up some.
hittrj01 - you obviously have not done a shred of corporate purchasing or you would not be able to so blithely state that corporate machines are cheaper than consumer machines. The only savings corporate purchases make are on the software and OS side where corporate licensing saves a chunk of change on the per seat install of Windows and other software. Most all of corporate units are higher priced, and since for many corporations they requirement a scrub and install of corporate approved OS and software have a higher cost to operate as well. This is why so many companies are moving to virtualized hardware - thin client boxes running a remote client (Citrix for example) into a virtual desktop on a VM optimized server cluster. No corporate buyer is going to bother with the poorly constructed, under performing "$200-$300 Dell", unless it was simply to offer a dumb unit for VM. And they can get a thin client box for cheaper than that.
Apple is the exception. They are positioned deliberately for the consumer market, and don't try to leverage corporate purchasing directly. They seem to have no interest in playing the corporate purchasing games that occupy the other hardware companies. For example, 80% of Dell's sales is tied to corporate purchasing, which for some reason didn't seem to help it gain back share against HP*. Interestingly also, the 70% or so of HP's sales are outside the US and therefore not tied to it's sales reported in the article, but again, both HP and Dell, for example, do more than sell units to companies, they also provides desktop, printing and other service plans - replacing in some cases traditional internal IT services and support.
It will be interesting to see how well Apple is able to maintain itself as a consumer technology company without relying on corporate sales to bolster marketshare. If you subtract out corporate purchasing and look only at consumer marketshare the numbers I think align quite differently.
This is just figures for shipping. Valuable, very interesting information, but I'd love to see what the install base is. I'm sure it's higher for many demographics (younger, home, university students) and lower in many (corporations, POS, cube farms, etc). Would be good to know the percentage of regular/active users.
Apple I believe has closer to around 7-8 percent of the market. Allow people forget that is just disclosing units shipped. Custom built machines on the other hand have no way of being tracked. I know the custom pc industry is a huge industry and millions of units are made each month. So while apple may have 11 percent of the computers shipped they do not have that big of total market yet.
Comments
One of their own recent annual reports practically bragged about the amount of profit they make - from ink.
What's really horrifying is that it frequently makes more sense to buy an entire new laser-printer than to buy new ink. HP's gouging in the ink market will inevitably end in a price-fixing investigation.
One of their own recent annual reports practically bragged about the amount of profit they make - from ink.
There's nothing inherently wrong with bragging about profits. It's done here about every day when talking about Apple and what they've been able to wring from consumers. It's almost a badge of honor to say you're proud to have paid a premium for an Apple product. As another example B&N and Amazon probably aren't making much if any profit from selling Kindles and Nooks, but probably do well selling book and periodical consumption on those devices.
FWIW, HP isn't simply reselling drums of ink developed and mixed in some Asian factory. They've got quite an investment in ink technology over the years. IMO, their new latex inks are particularly impressive considering the excellent color gamuts, impressive outdoor durability and very low environmental impact.
I'm not suggesting they be included in PC numbers, I'm just saying that the new category isn't 'Media Tablet', it's TC. The last thing Apple wants is for iPad to become a synonym for tablet computer - that way lies the kind of genericization that destroys trademarks.
I understand what you were suggesting, that Apple needs to start calling them "TCs." I am simply suggesting that Apple is far better off establishing the benchmark for what this type computer can be, as they do now, instead of creating a new generic category in which they would need to compete. Apple doesn't do generic, but the companies building Android tablets do. A new generic category would only invite references to the PC-Mac dichotomy, which Apple has worked so hard to escape.
There's nothing inherently wrong with bragging about profits. It's done here about every day when talking about Apple and what they've been able to wring from consumers. It's almost a badge of honor to say you're proud to have paid a premium for an Apple product. As another example B&N and Amazon probably aren't making much if any profit from selling Kindles and Nooks, but probably do well selling book and periodical consumption on those devices.
FWIW, HP isn't simply reselling drums of ink developed and mixed in some Asian factory. They've got quite an investment in ink technology over the years. IMO, their new latex inks are particularly impressive considering the excellent color gamuts, impressive outdoor durability and very low environmental impact.
I think the point being not that "bragging about profits" is intrinsically bad, but that this particular style of profiteering-- selling devices at close to a loss to drive absurd markups for consumables-- is fairly loathsome.
Bottom line is that HP (and others) are charging something like $8,000 a gallon for ink, and have engaged in aggressive tactics to suppress third party solutions. When you make a lot of your money off of that kind of model, it doesn't really speak well for your organization. It would be as if Apple made some significant percentage of its overall profits by charging $1,000 for laptop batteries while selling laptops for $100 and while simultaneously making sure that third party batteries were either unavailable or didn't work. And that that was actually the standard way of doing business in the laptop market. Oh, and batteries only lasted 3 months.
I think the point being not that "bragging about profits" is intrinsically bad, but that this particular style of profiteering-- selling devices at close to a loss to drive absurd markups for consumables-- is fairly loathsome.
Bottom line is that HP (and others) are charging something like $8,000 a gallon for ink, and have engaged in aggressive tactics to suppress third party solutions. When you make a lot of your money off of that kind of model, it doesn't really speak well for your organization.
They're really only shifting the profit center from the hardware to the consumables. I have no doubt they sell more printers by selling close to cost, and thus drive more ink consumption as well. That model actually has advantages for some consumers and small businesses, who can pick up a quality printer at a low price even tho they're low-volume users.
HP's professional line is a bit different in their pricing strategy. They do try to drive some profit from both hardware and ink. The printers themselves start at around $15K, but ink sells for about $160 a liter.
They're really only shifting the profit center from the hardware to the consumables. I have no doubt they sell more printers by selling close to cost, and thus drive more ink consumption as well. That model actually has advantages for some consumers and small businesses, who can pick up a quality printer at a low price even tho they're low-volume users.
I don't have much problem with this tactic from a consumer's standpoint, but I think it stinks pretty badly from an environmental one. A few years ago I bought a Samsung color laser which I was prepared to pitch in the trash when the included toner cartridges ran out. It wasn't cheaper to buy a new printer, but it was darned close. I ended up selling the printer to a friend for next to nothing. He was willing to take a chance on remanufactured toner cartridges. Otherwise a nearly new printer ends up in landfill. Sad.
I think you hit the nail on the head. The consumer market is such a small piece of the pie, but it's where all the profit is. Businesses, corporation, governments... they don't care about anything but the upfront cost of the machine, and Apple will never win that battle against $250-$300 per unit Dells. The thing of that, though, is that if you don't also sell support and services along with the machine, there is no profit in that market.
The consumer market as best as I can resolve from the statistics comprises roughly half of unit sales (on average - some less than others) for these companies, except Acer and Apple. Acer and Apple are almost exclusively consumer/small business unit sales. Of the top unit sellers, HP, Dell, Lenovo and Toshiba all sell a mixed package of desktop, laptop, server, storage and services to corporate infrastructure purchasers. You can see the impact of this on Acer for example, where they took a 40% drop in their shipping outlook due to softening of the consumer netbook segment. HP et al, all depend on the corporate refresh cycles to harden their market shares against the consumer volatility in PCs.
All of these companies see consumer as an add-on to their corporate sales, not a primary source. Consumer PCs from these companies are also second tier, cheaper versions of the PCs they offer corporate customers. Also remember that corporate refresh stalled when Microsoft introduced Vista and saw the backlash from it's issues. With the patched up Vista/Win7 release and confirmation from corporate test labs that it was the real deal, stalled corporate purchasing was released and was able to drive the market up some.
hittrj01 - you obviously have not done a shred of corporate purchasing or you would not be able to so blithely state that corporate machines are cheaper than consumer machines. The only savings corporate purchases make are on the software and OS side where corporate licensing saves a chunk of change on the per seat install of Windows and other software. Most all of corporate units are higher priced, and since for many corporations they requirement a scrub and install of corporate approved OS and software have a higher cost to operate as well. This is why so many companies are moving to virtualized hardware - thin client boxes running a remote client (Citrix for example) into a virtual desktop on a VM optimized server cluster. No corporate buyer is going to bother with the poorly constructed, under performing "$200-$300 Dell", unless it was simply to offer a dumb unit for VM. And they can get a thin client box for cheaper than that.
Apple is the exception. They are positioned deliberately for the consumer market, and don't try to leverage corporate purchasing directly. They seem to have no interest in playing the corporate purchasing games that occupy the other hardware companies. For example, 80% of Dell's sales is tied to corporate purchasing, which for some reason didn't seem to help it gain back share against HP*. Interestingly also, the 70% or so of HP's sales are outside the US and therefore not tied to it's sales reported in the article, but again, both HP and Dell, for example, do more than sell units to companies, they also provides desktop, printing and other service plans - replacing in some cases traditional internal IT services and support.
It will be interesting to see how well Apple is able to maintain itself as a consumer technology company without relying on corporate sales to bolster marketshare. If you subtract out corporate purchasing and look only at consumer marketshare the numbers I think align quite differently.
Long live custom pcs