HP says it’s happy with the installed printer base for the short-term because it means selling fewer low-margin servers.

HP’s Imaging and Printing group had revenue of $7.5 billion during the quarter, down 1 percent compared to last year. An 8 percent drop in number of consumer printers sold and a 9 percent drop in sales of commercial sales were offset by a 9 percent rise in sales of supplies.

At the same time, unit sales of multifunction printers rose 25 percent during the quarter, while unit sales of wireless printers rose 54 percent, according to HP.

Despite the overall drop in servers, HP is increasing its market share, which is making it easier to sell supplies.

For instance, increasing sales of wireless printers to home users may result in fewer printers being sold, but not in the amount of pages being printed.

The healthy installed base is more important to HP than selling more printers.

More than half of HP’s overall profits come from its installed base, a situation which helps insulate the company from dropping printer sales.

Last year, Kodak introduced a brand new low-cost ink strategy with the launch of the EasyShare multifunction printer line. Kodak offered cheaper inks for a higher upfront cost of a printer.

This strategy seems to have bothered Canon USA, which recently filed a complaint with the NAD of the Council of Better Business Bureaus. There are reasons for Canon to worry, even when Kodak has less than 1% of the market for consumer multifunction printers.

First, printer manufacturers hand around the hardware at little or no cost, making major profit on the ink. Second, Kodak’s ink is indeed cheaper.

Kodak’s new pricing strategy that breaks the current business model for consumer printers. Also, it is aiming at those who do a lot of printing of photographs at home — a selected group of Canon’s most profitable customers.

Mass adoption of EasyShare printers and word of mouth about the advantages of using low-cost ink could turn upside down the today market’s business model.

Speaking of the market. Of 61 millions sold printers, Kodak’s share is only 520,000 units. Kodak’s distribution channels are also not so broad. So why would that make a difference to Canon? Because Kodak doesn’t need to get a large overall market share to cause trouble. Approximately, 10% of consumers do 80% of printing, so all it takes is capture a significant portion of that small group to put pressure on the rivals. Perhaps that’s what Canon is worried about.

A study done by Electronic Frontier Foundation finds that most color laser printers add an identifying code on every page you print. This code is actually microscopic yellow dots printed on each page in a grid pattern. Normally these dots are invisible to the naked eye and can only be seen using a blue LED light.

The information in the yellow dots varies, some have just the serial number of the printer and others also have the date printed. On the picture below you can see the date and time when page was printed and the serial number of the printer.

Originally the technology was implemented to help secret services track and find counterfeiter who use color laser printers to forge money or securities. But now that color laser printers are becoming more affordable and more user gets them home, these tracking dots are making privacy advocates worry.

“There’s nothing about this technology that limits its application to counterfeit investigations,” stated Seth Schoen with the Electronic Frontier Foundation. “Some people who aren’t doing anything wrong may have their privacy threatened.”

During the test, BLI evaluates all critical performance areas, including reliability, image quality, productivity, print drivers, feedback to workstations, administrative utilities, ease of use, network setup, toner yield, cost of ownership and more.

HP Selected in Three Color Printer Categories

The HP Color LaserJet CP6015dn received a BLI “Pick” award in the large workgroup color printer category, while the multifunction printer based on the same engine, the Color LaserJet CM6040f, was recognized in the printer MFP category. “The CP6015dn and the CM6040f offer users dark text, smooth lines and good color output at a competitive price,” said BLI Senior Test Technician Tony Maceri. “And with HP’s standard security features and extensive color access controls, business users have multiple options to control the output devices on their networks.”

Meanwhile, Oce, a global leader in digital document management and delivery solutions was recently awarded four Spring 2008 “Pick of the Year” awards from BLI, too.

Three Oce color devices, the Oce cm4521, Oce cm5520 and Oce cm6520, won “Outstanding Segment 4 Business Color MFP” Pick of the Year awards; the Oce im4512 achieved the “Outstanding Segment 4 Monochrome MFP” Pick of the Year award. “We are honored to receive the level of prestige given to our devices by being awarded these ‘Picks’,” said Tom O’Neill, Director Product Marketing, Oce North America, Document Printing Systems. “BLI’s testing criteria and opinions are highly respected and winning these Segment 4 awards really shows our devices are in a class of their own.”