Anyone who follows the print industry is well aware that HP finalized its purchase of Samsung’s printing business on November 1, 2017 for $1.05 billion. The acquisition was primarily intended to give HP immediate access to Samsung’s technology portfolio, patents, engineers, and channel, while supporting HP’s ambitions to gain share in the A3 market and shift its business from transactional to contractual engagements. In its purchase, HP also acquired Samsung-brand A4 printers and MFPs that created quite of bit of overlap in HP’s LaserJet and inkjet-based portfolio. It also left the industry wondering what HP would do next to alleviate the crowded portfolio that it created. Now, 1.5 years after its acquisition, HP is finally providing clarity as to how it will leverage its A4 Samsung-brand portfolio and sell these devices within open distribution channels.
HP’s Open Distribution Portfolio Today
HP’s printer hardware portfolio for open distribution channels is quite crowded. It includes consumer-based DeskJet and ENVY inkjets, OfficeJet and OfficeJet Pro inkjets for SOHO customers, PageWide inkjets for SMBs, and laser-based LaserJet configurations that sell within a range of market segments.
As you can see from the chart above, HP’s portfolio includes a mixture of proprietary engine technology, engines sourced from Canon, and devices acquired through its purchase of Samsung’s printing business. HP has maintained a 25+ year long relationship with Canon, which has provided engines for HP’s very successful LaserJet portfolio. With its laser-based lineup already very comprehensive pre-acquisition, HP’s addition of Samsung-based devices brought a marginal expansion to its portfolio that primarily brought overlap to its Canon-based LaserJet lineup. So what’s next?
Why It’s Time for HP to Start Making Portfolio Changes
Under the terms of HP’s acquisition of Samsung’s printing business, Samsung would maintain control of its brand name for hardware configurations for two years. As HP approaches the two-year mark (November 01, 2019), the company needs to either phase out or replace portions of the Samsung portfolio. Though HP stated intentions to refresh portions of its acquired Samsung-based A4 printers and MFPs on a segment-by-segment basis, HP did not initially specify its replacement plans until recent activity was identified.
HP’s First Move to Leverage its A4 Samsung Portfolio
At the beginning of May 2019, gap intelligence retail collectors identified HP’s Color Laser MFP 178nw at Walmart for $199. A side-by-side visual comparison of the device shows very clear similarities to Samsung’s Xpress C480FW.
Upon further inspection, one could see that the HP-branded device shares many of the same specifications as the Xpress C480FW including 19/4ppm print speeds, a 150-sheet standard input tray capacity, and wireless capabilities, among other features. In short, HP took the Samsung-branded device it acquired and put its own brand name on it. The device is the first HP-branded low-end device that leverages Samsung technology to gain mainstream distribution through a major brick-and-mortar retailer.
As the hardware branding agreement between HP and Samsung reaches a close at the end of October 2019, the Color Laser MFP 178nw likely becomes one of several HP-brand products to sell using Samsung technology alongside products manufactured in partnership with Canon. For HP, this move continues a 6+ year effort to diversify its printer portfolio, which now includes Canon-based LaserJets, HP-based business inkjets, Samsung-based A3 printers and copiers, Samsung-brand A4 configurations (available through Oct. 31, 2019), and now an HP-branded A4 color laser AiO that leverages Samsung technology.
HP’s Next Moves
In the short-term, it is expected that HP will launch new HP-brand products with laser marking technology sourced through its acquisition of Samsung’s printing business. It’s expected that the devices will sell at a discount to HP’s prioritized Canon-based LaserJet line to capture demand from low print volume customers seeking a color laser device with an aggressively low hardware acquisition price (hence the distribution at Walmart and very competitive price point).
HP’s product launch puts into question the longevity of its long-standing relationship with Canon. If there’s anything we can learn about HP, it’s that the company willing to change engine suppliers (think back to when its A3s were sourced from Canon, then Sharp, and now Samsung), and there’s a very real possibility that HP may do the same within its A4 lineup. But for now, Samsung-sourced “Laser” devices and Canon-sourced “LaserJet” devices will sell in the same market targeting different market segments and allowing HP to address different customer types and leveraging each technology.
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