Dell Goes on Offensive with Printer Blitz

Dell has made significant strides against HP in the year since the Compaq merger was consummated, leapfrogging ahead of its number-one foe in the race for personal computer sales and posting gains in server and storage sales. But HP's printer business has always been one of its strongest market segments, in terms of both sales and profit margin.

"The printer segment was traditionally one that HP didn't have to worry too much about," Forrester analyst Rob Enderle told the E-Commerce Times. "They've always had competition, but the threat from a company that can also supply customers with all their other computing needs is a new wrinkle."

Do It Direct

However, Dell spokesperson Jess Blackburn said the company entered the printer business not as a competitive response to HP's Compaq purchase, but because it believes its direct sales model will work for peripherals as well as it does for PCs.

"We think we can provide he same kind of customer experience that we provide on the PC side," Blackburn told the E-Commerce Times. "The early response seems to support that. But in the long run, that means having a variety of products and price points available."

New Products, Prices

Dell's rollout will include a laser printer, an inkjet model and a combination printer/scanner/copier, boosting the company's printer product line, which debuted this spring after months of rumors and speculation, to seven models in all. Printer maker Lexmark, long a distant second to HP, will produce the devices.

The network-ready laser printer will target enterprises and will carry a price tag of US$999. Meanwhile, the inkjet model, with a ticket price of $99, will target price-conscious consumers, as will the all-in-one machine, which is expected to sell for $89.

So far, according to Dell, its printers have sold better than initial projections predicted last year.

Spreading Out

The effort by Dell to gain a foothold in another market comes as the PC industry braces for another slow year. Several recent forecasts have predicted low-single-digit sales growth for 2003, followed by more marked improvement next year.

Dell is not the only major manufacturer that has diversified its product lines to alleviate dependence on the lackluster PC market. Gateway has targeted the home-electronics market with its line of televisions, and HP has made expansion of its services business a major theme of its post-merger growth strategy.

In addition, Dell, Gateway and HP all are rolling out new versions of handheld devices this week, timing their releases to coincide with Microsoft's (Nasdaq: MSFT) upgrade of its mobile-device software.

"Companies are going to wring whatever growth they can out of their existing markets, but they all realize the PC market isn't going to supply much of a boost in the near term," Enderle said. "The smart companies are the ones that don't sit back and wait for it to come to them."