Dell considers entering the printer business!|
(Tuesday, July 23, 2002 - 19:03 EDT)
Hewlett-Packard doesn't seem too pleased by the news, but will their shareholders be pleased at losing the business of one of the largest computer manufacturers?
An interesting news article on c|net News.com details a newly developed animosity between Hewlett-Packard Co. (the world's largest printer manufacturer) and Dell Computer Corp. (the largest direct-order computer manufacturer, and amongst the largest PC makers too). It seems that Dell's long-standing competition with Compaq is the root cause behind this dramatic step.
Dell has long offered HP's printers with its computers, but since the company announced its intent to merge with one of Dell's largest competitors, the question of what would happen to the cooperation between the printer and computer giants has been on the cards. The first hint of what was to come was given when Dell began to source more of its printers from other manufacturers such as Lexmark. Many expected to see the two companies sever ties altogether. A precedent for this had already been set when Dell dropped Digital Equipment Corp. (DEC) - their field service provider - after DEC were acquired by Compaq.
That has finally been confirmed, with HP's Diane Roncal stating:
"The basis for the relationship is no longer valid, given the company's intent to sell Dell-branded printers." Dell spokesman Mike Maher, meanwhile, commented:
"We're befuddled that the mere possibility of us entering the printer business would make them so nervous. It seems counterintuitive that in this market you would want to make it harder for customers to get your products." Dell customers will still be able to get HP products; the company will just purchase them through the distribution channel, which would increase costs somewhat. HP, though, seem to have put themselves in a worse situation - at least if c|net's sources are correct in believing that Dell was one of the company's largest sales sources, offering their printers, digital cameras and handheld PCs.
As for Dell's printer intentions, these are still not clear; the company's President, Kevin Rollins, has stated that:
"My guess is sometime soon, you'll see us in the printer business...with a Dell-branded printer. Probably by the end of the year, you'll see something."