14 January 1999

Welcome to the first issue of Dotty-Spotty! In these columns, I will explore the home printers that allow home users to generate high-quality output, including notes on the technology, background, and future of these printers.

The Price Issue. In this first issue, we'll look at the favorite topic of US buyers - price. Prices have certainly changed in ten years on printers, but not always as you would predict, and have reflected the choice of consumer trends over time.

Amazingly enough, ten years ago, you could not buy an inkjet printer for less than $1000 USD or a laser printer for less than $5,000. Following the rapid decline of computer prices (at least 50% a year), printers today sell for less than $100 new and perform faster and better than even those from last year.

Brief comparison of printer prices

As a brief comparison, laser printers had a cost of about $5000 to $10,000 ten years ago; inkjet printers, $1000 or more; and even the lowly dot matrix printers commanded a premium of $500-1000. Even so, the cost of a dot matrix printer was akin to the deposit on a new car, and a laser printer did cost that of a new car!

The dot matrix printer was king and the most popular home printer due to it's durability, speed, features, and easy-of-maintenance. Many greeted their first Epson dot matrix printers along with their first computers, and these workhorses of the printer industry were and continue to work for many years.

Many factors led to the popularity of the dot matrix printer, but one stood out above all else - price.

The 80s

Travel back to the 80s, you'll note a lack of one thing we find so pervasive and popular today -- computers, and specifically, computing power. The fastest machines ran at a heady 1Mhz!, if you had several thousand dollars to buy one, and storage devices, such as 360KB disk drives, ran for hundreds of dollars (not to mention the high cost of media -- usually $10-50 per diskette).

Accordingly, complex imaging devices depend upon powerful processors to rasterize an image of the page before it is output, take millions of calculations, and, with color output, consume upwards of dozens to hundreds of megabytes of memory per page.

Naturally, this ruled out the laser printer for 99% of home users, and certainly inkjets as well. Dot matrix printers were simpler by comparison and were far easier to run. They had the lowest resolution on average of all these printers, and their mechanisms had been proven in dozens of industrial and retail applications like bar code printers and checkout registers.

A quick comparison

As a quick comparision, a 300dpi black and white laser printer needs to have sufficient memory to hold an image of the full page before printing it:

(300 dots per inch x 8.5 inches) x (300 dots per inch x 11 inches) = 8,415,000 bits or 8,415,000 bits / 8 bits per byte = 1,051,857 bytes A 100 dpi dot matrix printer (quite the leading edge resolution then) would need: (100 dpi x 8.5") x (100dpi x 11") = 935,000 bits or 116,875 bytes

Besides the cost (or lack of) computing power, the cost of consumables was the second reason the dot matrix printers were popular. Averaging $10-30 for a new ribbon that could last several hundred pages vs. $200+ laser toners and $50+ inkjet cartridges, it was clear to everyone who wanted a home printer which they would buy if they wanted to remain solvent. (and, you could reink the ribbons yourself...)

In any case, the dot matrix printers hammered along (hummed merrily?) for years until the single most significant computer was released that revolutionized the graphics and home printer industry -- the Apple Macintosh. At this time, dot matrix printers could be had for a $500 bargin, and every computer program had drivers and support for them.

When the Macintosh was released, it sold for a premium above other computers such as the Apple II, the Radio Shack TRS-80, Atari 800, Commodore 64 and Vic- 20, and other computers of that era. However, was the first popular home computer that had a 32-bit processor (thanks to the Motorola 68000; other computers at that time had only a 8-bit or 16-bit processor); a large amount of memory and hard drive space, and most importantly, an operating system that was built on a graphic user interface (GUI) coupled with a mouse.

The latter alone paved the way for programmers to easily create programs that allowed one to draw images with the mouse on screen, select and edit text, create layouts and more. And the extra processing power of the 68000 allowed Apple to make its mark in history with the release of the Apple Laserwriter. When the Laserwriter was released, it set the printer industry upside down once again, and launched the world into the modern day of computerized publishing. Average price - $5000-$8000.

What set this duo apart from prior attempts to introduce the laser printer to the home and business market was the combination of processing power and features that made sense. The computer was not so under-powered that it could not handle rasterizing a page, the printer had taken advantage of the latest developments in processors and memory to be able to rasterize the page and print it. Together, one could print documents which could only before been typeset and offset printed with a small investment (for a business, or even the many entrepreneures at home).

With the dot matrix printer at home and the laser printer at work, both grew in popularity in their segments of the market, and naturally, the prices fell as they were purchased in growing numbers (cheaper to make lots of something; dropping memory and processor prices; etc.).

The late 80s

As we enter the late 80s, we see that dot matrix printer have dropped to the $200 range, and laser printers have also declined to around $2000. It is at this time that many manufacturers from Kodak to HP reexamine the technologies in use and introduce inkjet printers as a 'better' printer than the dot matrix at a lower price than the laser printer. The first significant inkjet printer was the original HP Deskjet.

At that time, computers had just enough power to process a page with a few small graphics, and people were looking for something better than the standard 24-pin dot matrix printers. The Deskjet, even at $1000, was a comprimise between the $2000+ laser printers, and the dot matrix printers. Similarly, one could throw a processor into an inkjet that could control the dozens of inkjet nozzles firing millions of times over the course of pages. Dot matrix printers were seeing the dawn of a new era in printers, and they were limited by the physical limitations of print head and ribbon speeds, unadored tractor feed paper, and the racking noise of the hammer based technology.

Within years, the inkjet printer had become the most popular home printer around the world for the quality, speed, and most importantly, color output aspects it possessed. Like going from B/W TV to color TV, color popularized a dozen applications like Print Shop and made having an inkjet printer a very seductive choice over the other B/W printers. (yes, they did have 4-color ribbon dot matrix printers like the Apple Color Imagewriter and Epson JX-80, but even the output quality from the first 90dpi color HP Paintjet was light years ahead of the dot matrix printers.)

Following the trend in the computer industry, printers dropped in price as the processors became less costly and more powerful, and the number manufactured skyrocketed.

Inkjet printers today

Today, you can easily buy a good inkjet printer for under $100, a laser printer for $150, but suprisingly, a dot matrix for usually more than $150. (eg. Cheaper Canon inkjets $90; Okidata 4W $149 - see www.shopper.com to search for the lower prices on various printers and computer equipment)

Inkjet printers are quite simple vs. dot matrix printers. They both have the same base parts - big motor for feed and drive - but the dot matrix printer has the additional cost of many mechanical parts in the printer head and such which require assembly. An inkjet printer head is usually constructed by lasers punching through metal, and a laser printer is simply reduced to a fixed row of LED lights to image the rotating drum (in the Okidata printers, others use a more costly laser beam and rotating mirror assembly). Inkjets and lasers are also the most popular choices in home and business applications respectively. As a result, the dot matrix has been relegated to outputting the untrendy triplicate forms, and even their future there is uncertain as everything goes online.

The cost of manufacturing printers have also dropped as plants have moved to the cheaper South Asian countries such as Malaysia and Singapore, and to Mexico, instead of Japan and the US.

As the world's largest market and consumer of computer equipment, the consumer trends in the US have driven the market towards lower priced printers. Above all else, the US consumer will not stop until they have the lowest price deal they can find on most purchases, computers notwithstanding. In Japan, consumers value design, functionality and other aspects above price (but this is changing as their economy enters deep-freeze. And in other areas, price is not the foremost concern, especially if only a few dozen dollars are the difference.

All of this can be traced back to the marketing tactics and focus taken by advertisers in the US. Who can forget the two for one deals often advertised? The promises of stores they'll match and beat competing prices? And today, the everyone on the Internet can easily check dozens of vendors for the best prices in a matter of minutes (by the way, even some price search engines like www.shopper.com don't always have the very lowest available prices listed because they charge the vendors to be listed; still, they have nearly the lowest prices listed).

Well, if you think prices today are the best ever and the consumer is king, think again. The printer manufacturers still want to make money, and they've figured out quite a good way of doing so in consumables.

The price of consumables

If you look at the price of inkjet consumables over time, you'll realize that ten years ago, you could buy an HP PaintJet cartridge for $35-45, yet unlike similar trends in the computer industry (of 50% decline a year or even following other consumables like diskettes), inkjet cartridges have remained at $20-30.

Ahh! But you suggest that it is costly to make one. Nope. The liquid ink is cheap and can be made by the thousands of gallons easily -- if it was costly, think how expensive magazines and newspapers would cost. The cartridge itself then? Nope. Plastic is one of the cheapest containers available, and for those cartridges with built-in inkjet heads, metal punched with laser beams is a very simple, cheap manufacturing technology.

In fact, inkjet manufacturers make 100% or more profit on each cartridge, and they encourage people to print in color projects that use lots of ink. E.G. HP offering handouts of 'ideas' and things you can do with color inkjet printers -- buttons, cards, etc.

Think about it. There is no economic reason for a company to encourage people to do anything unless there is a business reason behind it (assuming their a for-profit business, got the usual bottom-line conscious MBAs and share holders, etc.). So in a business where the recurring profits occur in the purchase of consumables, all of the inkjet printer companies are naturally warry letting others enroach upon this. They tell people they won't repair or support printers damaged by the use of third party refils or cartridges (like a car maker that refuses to support it if you use X-brand motor oil), they don't build very large inkjet cartridges (why not? no weight problem, even dot matrix print heads weigh more than inkjet cartridges and fast dot matrix printer head motors move very fast), and they even modify their inkjet cartridges to prevent easy refiling of cartridges (those black HP Deskjet cartridges).

The best future for us is for smart entrepreneurs reverse-engineer the composition of these inks and make the formulas publically known. (Those with access to chemistry labs and mass specs, get started!) Inks cartridges can be made for $1-5 quite easily.

The arbitrary premium charged for faster printers

Not only that, they charge a premium for faster printers! Duh, you say, that's right. If it's faster, it must be more expensive!

Up to a certain point, yes, this is true. But unlike computer processors, which have always cost more for speed, printer mechanisms are mechanical, not silicon, devices which cost no more than the metal they're built from. Like a motor, the incremental cost of adding more metal to go from a four-cylinder motor to an eight-cylinder motor is minor. Durability and other factors remain approximately the same with a good design.

Thus, you usually see a line of printers from a manufacturer that use the identical cartridges and print heads, yet priced according to their speed.

Hmmmm......

Again, this 'differentiation' is to prevent people from buying that super-fast, but dirt-cheap, printer for $100 that will do everything quickly. These won't add much to the manufacturers' bottom lines and they want to make more money. So they sell a slower printer to those who can't afford anything more (college students for one; the clueless for another); and they sell the more expensive printers to the masses (who want a faster printer and figure they can afford the $100-400 difference).

Add this up and you can see profits of 50% on printers, and more than 100% off consumables.

Luckily, if you recall, the US drives the market. And being the cost savy consumers they are, they will not buy printers that cost more next year than the similar models introduced earlier, nor will they stand for it. In fact, printer manufacturers must introduce something 'significant' before a higher price point is accepted in newer models. Slightly faster speeds, a few features and minor token enhancements will not work well on the US consumers. And happily, because consumers buy by price first, they will choose a competing product of the same quality and features over another time-and-time again. Thus, once one manufacturer has released a slightly cheaper printer, the others must follow or somehow differentiate themselves.

In this case, you see Epson tooting the photo-quality prints from their printers, HP tooting their RET technology, Canon tooting their CDs of software, etc. In some cases, there really is a difference: in this case Epson Photo Stylus printers are much better than the other photo inkjet printers.

The future...

Over the upcoming years, you'll see the number of $100 high-quality inkjet printers grow while the cost of consumables will remain high. (Already, you can get a top-quality photo inkjet printer for about $100 - The Epson Stylus Photo 780.) Because an increasing number of people will be buying printers year-over-year, the manufacturers can drop their prices while making a good profit due to the greater quantity sold. (and once China gets started..., maybe we'll see great $50 photo printers..) In the meantime, be smart and use a price search engine to find the lowest prices online, then add any coupons, rebates, etc. you can find online -- read my smartpig article for futher information.