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Color Laser Market Poised For Growth As Prices Plunge

4/05/2004 02:00:00 AM Eastern

Color laser printers are possibly within a year of being priced competitively with high-end inkjet printers, and the major vendors are starting to prepare with products and promotions geared for the retail market.

Traditionally, color laser printers have been priced well above what almost any consumer and many businesses could afford to pay, but now price, and to a lesser extent photo printing capabilities, are starting to approach what inkjet printers can deliver.

Prices are now under $700 for stand-alone color laser printers and this mark may sink below $500, a point at which the printers will attract a great deal of interest from the SO/HO and high-end consumer markets, said Greg Wallace, Hewlett-Packard's VP, worldwide business marketing.

"Color laser is getting ready to take off. Color is key for small and mid-sized businesses and that part of the market is primed," Wallace said, adding that HP is having good success at retail with its current color laser lineup, although few of these sales are going to home users.

However, Wallace has no doubt that this situation will change.

"Color is going mainstream, partly because of affordability and partly because of usage. The value is finally there for customers," he said.

Steve Baker, senior IT analyst with The NPD Group, Port Washington, N.Y., also expects to see an uptick in color laser sales due to price decreases which should lead to an increased retail presence for these products.

"I would expect distribution to broaden out from the office and PC superstores into the Best Buys and wholesale chains," he said.

The HP LaserJet 2500 is the company's first entry in the sub-$700 sector, a breakthrough price point, according to Wallace.

Samsung also sees color laser as a market poised for explosive growth, said Jay Shears, Samsung's office automation director. He expects entry-level color lasers to be priced competitively with higher-end inkjet printers within a year, and to prepare for this eventuality, Samsung has just introduced the CLP-550, its first model that it hopes will introduce consumers and SO/HO to the color laser printer (see story, above).

The CLP-550 is the first of what Samsung believes will be a long line of color printers that will start attracting a new segment of the market, the home user. Wallace said the price delta between inkjet and color laser will soon approach the point where a savvy consumer will realize the long-term cost effectiveness of laser technology and pay the extra couple of hundred dollars for a color laser model.

"The challenge with color laser is to get people to use it as a multiuse machine to print both text and color. Most now use it only as a dedicated color device," Shears said.

This should become less of a problem as color laser continues to drop in price; however, color laser still lags behind the inkjet printer's ability to create photo quality images. Because of this, and to a lesser extent, price, Shears sees inkjet dominating the under $100 segment and color laser the more expensive price points.

Baker concurred, saying one of the stumbling blocks for wider color laser acceptance is it still cannot match inkjet's digital image printing capability and this could limit its acceptance with consumers. In addition, the low cost of monochrome laser printers could be a barrier as people buy them for text printing and keep an inkjet handy for their color and image work, he said.

Retailers can point out to SO/HO buyers that a laser printer gives them the ability to handle many jobs internally, such as marketing proposals and presentations, instead of relying on an outside service like Kinko's.

Shears said simply adding a dash of color to a business proposal instantly gains a greater acceptance and recognition, and when this can be done at no extra cost, it is a no-brainer for a small company.

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