We Have Not Seen Or Received Any Evidence Of Partners Being Billed At Above MRP Prices HP
Post on: 2011-09-05 By: admin
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We Have Not Seen Or Received Any Evidence Of Partners Being Billed At Above-MRP Prices: HP
By Dhaval Valia and Amit Singh
What’s the growth agenda for HP IPG over the next 12 months?
India represents a 120 billion-page opportunity over the next three years. Content in India is growing at twice the global rate, and there’s a definite movement from analog to digital printing. India is also the fastest-growing managed print services (MPS) market in the Asia Pacific. To leverage this opportunity we recently announced a three-year growth strategy. We are strengthening our geo-expansion programs to optimize young consumer opportunities in non-metro and upcountry markets.
The other growth driver is the education sector, where we will invest substantially to create partnerships with content providers who drive the need for printing.
What are the challenges you foresee for HP IPG?
We are working to sustain double-digit growth for the IPG business and aim to gain market share in each of the categories we are present in.
The universe of printing is increasing with more people finding new content to print from new sources, including social media. The Web is changing the way how both consumers and businesses access and consume content.
We have already taken printing to the cloud with ePrint technology. ePrint-enabled printers have a unique email ID and allow users to print content from any device from anywhere just by sending an email to the printer.
Thus, our aim is to drive both the home and business printer categories by re-architecting printing for the cloud to meet customer needs.
What are the plans for your channel partners on the MPS and document management front?
According to IDC, the APEJ market for MPS was estimated at $530 million in 2010 and is expected to reach $990 million by 2014. India is the fastest-growing market in the region.
Our MPS strategy is 3-pronged—optimizing customer infrastructure, managing their print environment, and improving the workflow.
MPS can be a gateway for channel partners looking to expand into the enterprise market, and we are conducting a series of training and marketing initiatives for partners.
You have joined HP IPG from IBM/Lenovo. As a non-HP person are there any fresh ideas you plan to implement?
I am absolutely delighted to have the opportunity to lead and drive the next phase of innovation-led growth at IPG. I see great opportunities in areas such as education, SMBs and graphic solutions, and also in reaching out to new markets through geo-expansion.
HP is betting big on ePrinting and mobile printing. What are the plans to make this concept more pervasive in India?
HP ePrint enables all types of users to manage content, and print quickly and securely by simply emailing their desired files. This is an industry-first innovation and makes our product offering unique. We offer nine models of Web-connected printers at various price points starting at `7,000. We expect 20 million Web-connected printers to be shipped worldwide this year.
Many partners complain that HP is pricing itself out. Your products are priced at least 20-25 percent higher than the competition.
We have over twice the market share of our next competitor. We also have a portfolio that’s nearly three times larger than that of our next competitor. Factors such as TCO have helped HP maintain its undisputed leadership. This wouldn’t have happened had the customer not seen the value in buying HP products.
Profitability is another issue. Partners complain that they are working on wafer-thin margins.
For all consumer products, HP does not dictate the final end-user price. It’s left to the partner to negotiate with the customer. There’s a healthy margin between the MRP and the tier-1 transfer price. You also need to factor in the recent inflationary trends which have compounded the margin pressure on the trade. Having said that, we are cognizant of this fact and are evaluating options which can help improve the value retention for partners.
What new tech innovations are we likely to see from IPG over the next 12 months?
We are focused on developing Web-connected, cloud-aware printers.
We recently demonstrated an app that allows a user to retrieve the confirmation status of his IRCTC railway ticket by simply scanning the ticket on an HP AIO. The AIO does intelligent processing of the document on the cloud, extracts the PNR, and automatically retrieves the status from the IRCTC website.
Such innovations are happening out of our India RD center.
Give us an overview of your commercial digital printing business. How big is the addressable market?
HP’s commercial printing solutions address all domains including retail photography for photolabs. There’s Web Press for the publishing industry; Reprographics is targeted at design professionals from architecture, manufacturing and civil engineering workgroups; and Signage solutions is for printing on a wide range of materials.
We foresee a $4.5 billion publishing market in India. Before the advent of digital printing, nearly 65 percent of all print was thrown away unused. Nearly 25 percent of printed collateral is discarded before use. 30 percent of book stock remains unsold and is eventually re-pulped. Digital printing cuts this wastage with lower print runs.
HP’s graphic solutions business has a 90 percent share in the Designjet market space, and is a leader in the signage market.
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