IBM eyes HP toner cartridge sales

IBM has lined up HP's consumables strength in its sights, releasing a line of toner cartridges for HP laser printers with the express aim of winning market share from its rival.

Jillian Maclean, printing systems division executive at IBM Australia, said Big Blue was launching 10 toner cartridges specifically designed for HP's range of LaserJet printers. The range would move via an exclusive distributorship deal with IT Wholesale.

'IBM decided there was a market opportunity here,' she said. 'However, there is strong customer demand for a lower cost, high quality [toner cartridges] for HP printers.'

The cartridges were up to 50 percent cheaper than HP's yet were of similar ISO9000 quality and yield. IBM had been making toner cartridges for its own printers, but HP's market share had become a target too good to ignore, she said.

'If you look at providing customer satisfaction ... you've got people constantly complaining about costs. The focus is on cost reduction and supply is a part of it,' Maclean said. 'We've got our own market share but a lot of people talk about the market share HP has got.'

She could not say why IBM's offering was cheaper. However, she maintained that the quality, including average yield and reliability, was as good as in HP's versions for the same printers.

IBM had sought out a manufacturer with an eye to producing a range 20 to 25 percent cheaper than HP had produced. However, IBM believed its range could work out up to 50 percent cheaper, Maclean said.

IBM had not discussed its intentions or new offering with HP, she said.

'If you are looking at providing value to our customers around printing, there's a significant market in supplies. And if you look at providing customer satisfaction, Gartner data shows that one to three percent of customer costs is printing,' Maclean said.

Darryl Tucker, GM at IT Wholesale, said the distributor expected to do $2.5 million in sales of the IBM toner cartridges in the first 12 months and $5 million the following year.

He said that IBM had approached the distributor with the opportunity to add the consumables to its range of IBM X-series servers, desktops and notebooks. IT Wholesale also shifted IBM's point-of-sale system, he said.

'But we have been more of a hardware provider,' Tucker said.

HP was contacted for comment. However, a spokesperson for HP said that Imaging and Printing group boss Rebekah O'Flaherty was unavailable for comment both Thursday afternoon and Friday morning.