HP Print Division Expects Slightly Better 2011 than 2010

 
 
By Chris Preimesberger  |  Posted 2010-09-29
 
 
 

Hewlett-Packard's top printing and imaging executive told analysts Sept. 28 that the IT giant's franchise in that sector expects to report flat to 2 percent growth in 2010 and that he believes his division will improve to between 3 percent and 4 percent growth in 2011.

HP's Imaging and Printing Group (IPG) is a $29 billion annual revenue business-with margins in the 16 to 17 percent area-that encompasses ink jet, LaserJet and commercial printing; printing supplies; digital photography; entertainment; graphics; and managed services.

Executive Vice President of the Imaging and Printing Group Vyomesh Joshi said he expects more than 5 billion pages to be printed on HP's ink-jet Web press printers, based on HP's global installed base, by the end of 2010.

HP has been leading the world digital printing market-enterprise, consumer and online-"for the last 26 years and expects to stay there," Joshi told the audience at HP's Securities Analyst conference at the company headquarters in Palo Alto, Calif.

"The No. 1 trend here is the content explosion, especially that content which will need to be printed over the next three years," Joshi said. "About 200 billion pages move from analog to digital every year, and we have the broadest portfolio with which to capture [that market]."

The second key trend is about mobility and the Web. Joshi said. HP initiated its mobile ePrint initiative last spring in a partnership with Research In Motion, FedEx Office and Hilton hotels.

"In 2010, more printing will be done from the Internet than from word processing," Joshi boldly said. "We expect there to be 300 million smartphones and tablets in the world by 2013. That could mean 26 billion pages per year printed by people-maybe 100 pages per year per user. That's not a lot," Joshi said.

BlackBerrys only for ePrint system

Using ePrint, a person with a connected handheld device-at this time, only RIM BlackBerrys can do this-can search for the nearest connected printer wherever it may be located, enter a security code, go to the printer and obtain the printout on demand in a matter of minutes.

The first locations for these publicly available printers are at the 1,800 FedEx Office locations and Hilton-related hotels (Hampton Inns, DoubleTrees and several other brands). HP is working on making more printers available within a 1-mile radius of any given location inside a city.

A key subset of the printing business, supplies-which means mostly ink-actually brings in 67 percent of the division's income, while 21 percent comes from selling commercial printers and 12 percent from consumer sales, Joshi said.

Joshi explained a number of growth initiatives outside of the company's traditional ink-jet and laser printer businesses, including printing services and solutions and higher content printing markets such as retail kiosks and digital printing presses.

HP expects these "non-core" markets to represent about $191 billion (or 70 percent) of the printing division's total addressable market by 2013.

Analysts at Raymond James reported after the conference, "We see significant opportunity for HP to capture increased page volume from the 200 billion pages shifting from analog to digital each year, which allows digital press technology to capture traditionally unavailable content such as books, news and coupons."

HP has also shown increased traction in its efforts at retail partners, adding 4,000 new storefronts in 2010, including an expanded relationship with Wal-Mart.


Rocket Fuel