My greyhound can run faster than your honor student.

Saturday, June 25, 2005

Dell caused some ripples last week by announcing a new laser printer for only $99. If that was the only breakthrough I probably wouldn't be writing this.

The home printer business model has been similar to the King Gillette philosophy of "give away the razor and sell the blade." You can find very low priced, and sometimes free, printers, but when it is time to replace an ink or toner cartridge you get sticker shock. There are huge margins in replaceables to offset the low, zero, or even negative margins on the hardware side. When I first saw the headline for the new Dell printer I assumed it was going to follow the same business model, however they decided to aggressively price the toner cartridges as well.

The price per 2,000 pages of toner for Lexmark's cheapest printer is $94, or 4.7¢ per page. Dell is pricing their toner at $65 per 2,000 pages, or 3.25¢ per page. That is almost 1/3 cheaper.

Then I thought the printer must be a dud. Nope. It prints 15 pages per minute which is 4 seconds per page, it does this at a resolution of 600 dots per inch. Two megabytes of memory. 150 sheet input tray. A rated duty cycle of 5,000 pages per month.

One additional feature at first I thought was a stupid gimmick for simpletons, but then I started thinking about it and it actually is a great idea. Dell developed a patented toner management system. It monitors your toner level and proactively notifies you before you run out of toner. The cool part is that it is integrated with an on-line purchasing system that connects directly to the Dell website. What a timesaver. The printer will know how fast you go through toner, so it will know when to order a new one before you run out, and might even place the order itself if you set it up with your account information. My first reaction was I don't want to be locked into automatically buying their replaceables, but then I thought I would be ordering from them anyway, so why not automate the process. If I am about to run out of toner it's not like I would be thinking "Hmmm, do I want to be able to continue printing or not? Hmmm, I better think about this before I do anything. Hmmm."

Our ink jet is doing OK for now, but if it broke I think chances are excellent this would be the printer I would buy. I never was much into using the inkjet for printing photos, and now with Wal-Mart's new service I don't think I will ever have the desire to do that. I would guess that close to 100% of what we print doesn't have a color component anyway. If I really did need to print something in color I can send print jobs over the internet to the Kinko's that is just a five minute drive from here. Any more the only things I can think of that I would have to print in color might be something for a GIS job, but that has yet to be a requirement. When I was going back to school I had to print some assignments in color.

One thing to keep in mind before you buy a laser printer is that the location you intend to place it needs to have an electric outlet the printer can plug directly into. You don't want to just plug this into the power strip that your monitor, PC, scanner, etc. are plugged into. The fuser inside the laser printer gets very hot (think extra large curling iron that can heat up in a matter of seconds) and therefore draws a lot of current. You will wear out your surge protector (Yes they wear out. Every spike it absorbs shortens its life.) and introduce a lot of voltage fluctuations to the components sharing the surge protector.

I liked the comment that an analyst from Needham & Co. said: "Dell is going to screw everybody." He was referring to HP, Lexmark, etc. that are going to have to offer something comparable or lose a lot of sales.

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