I bought a small personal laser printer last year. It was on sale at the local electronics chain and cost me all of $79. It is small, less than 1 cubic foot in size, weighs less than 10 lbs, has a 1200×600 dpi print resolution, and is rated at about 22 ppm print speed. This is less than 5% of the price I paid for a far less functional laser printer 15 years ago. Then, I paid over $2000 for a 6ppm, 300×300 dpi printer, that must have weighed 30 pounds.
My little printer came with a toner cartridge that has only now begun to run out, over a year later. I went online to purchase a new toner cartridge. I was surprised (should I have been?) to find that a new toner cartridge cost $99. Now this cartridge will print for about twice as long as the original, but it’s hard for me to get over the fact that the toner cartridge costs more than the printer. How can I purchase a printer and toner for $79, but a replacement toner cartridge costs $99. BTW this is about the same price I paid for toner for my original $2000 laser printer 15 years ago.
Now, I’m used to this scheme with ink-jet cartridges — it’s the old razor blade model. The idea is that you’re not buying a shaver, but in fact, a subscription of sorts, to blades. It’s a recurring revenue model and seems to work for razors. In the context of shaving, it is the blade that has the value — consider the 5 bladed, Fusion razor as an example. If I want a close shave, I focus on the blade. The handle has little value except to enable the blade to do it’s job, but if I like the blade, I will buy and use more.
But in the printer world, it doesn’t apply that easily. At least it did apply 15 years ago, but doesn’t apply today. Why not? If we look at the printer as the handle, and the ink/toner as the blade (recurring revenue stream), it is the handle (printer) that has the real value. The toner/ink only enables the printer to do it’s job.
Also, the “handles” get better and better every year. My little laser printer from last year has been replaced by a better model that is faster and has a couple of additional features as compared to mine and costs about… you guessed it…$79.
But even more important, there are many other printers on the market that I can choose from. Aside from basic laser printers such as the one I purchased, there are colour printers, printer/scanner/copier combos, networkable printers, etc. etc.
The cost of these printers is, in my opinion, incredibly cheap, far below what I believe it costs to make them. I saw an Epson color ink-jet printer/scanner/copier on sale for $29 recently. Think about that. What other technology can I get for $29? Not much. A router. 2GB of RAM. Some flash memory. A video game. A full single colour ink jet cartridge!
So what did I do given this dynamic? Instead of buying a new toner cartridge for $99, I decided to spend $10 dollars more and bought this baby. It prints at 2400×600 dpi, scans, copies, OCRs text and much more. And yes, it comes with a toner cartridge.
So, here’s the question. How viable is this pricing model? Granted, I’m a light user of printers at home. And if I run through 1 or even 2 printer cartridges a year, I’m going to benefit every year from better printers at cheaper prices. I fully expect that a year or two from now, I will be able to get fully networkable, colour laser printer for about what I paid for my monochrome printer this year. How is this sustainable? Or am I in the minority of users who don’t print very much and thus can benefit from such low prices?
Thoughts?
Saeed