A recent article in All Things Digital highlighted the features of HP’s new printer – the Premium All-in-One with Touch-Smart Web. HP is trying to drive sales of ink cartridges (particularly color cartridges) by making it easy to print color photos, maps, coupons and movie tickets. The new printer includes a touch-screen web interface designed for quick access to sites like Snapfish, Google Maps, Coupons.com and Fandango. About 24% of the $50.66 per share Trefis price estimate for HP’s stock is attributable to HP’s Printers & Ink cartridges business. Much of this value comes from selling ink and toner cartridges rather than printers.
Printer Ink & Toner Supplies Pricing has fluctuated between $39 and $44 historically but we expect a steady decline over the Trefis forecast period due to declining printing demand and the growing availability of third-party low-cost replacement ink cartridges. Printing demand has fallen as a result of growing paperless communication and records. By focusing on color printing in the home, HP is attempting to shift demand to higher priced color cartridges where the quality of ink delivery is particularly important and HP has an advantage over low-cost competitors.
Within HP’s content on our platform, you can see how HP’s stock would be impacted if Printer Ink & Toner Supplies Pricing were to increase rather than decrease due to a shift towards more color printing in the home.
