Kodak is exiting the printer business after their attempt to subvert the industry’s typical business model failed.
Printers are the kind of purchase that people make based on price sensitivity. Few understand that the real cost of a printer is not its upfront expense, but rather the cost of replacement ink over its lifetime.
Most printer manufacturers have adopted the Gillette shaver business model. Gillette takes a loss on every handset and makes it profit on replacement blades. Hewlett-Packard — the dominant printer company — exemplifies this approach. They lose on every HP printer they sell just to make a handsome profit on ink cartridges.
Kodak tried to do the opposite: Make money on its printers by selling them for around $150 and then sell ink at rock-bottom prices. That unique approach only won Kodak about two percent market share in the printer business.
Fortunately, Kodak’s loss can be your gain. Now that the company is in bankruptcy, they’ve decided to exit the printer selling business yet continue selling ink at reasonable prices. So look for the Kodak printers themselves to go on discount. They should now be offered at comparable prices like you’d find from Brother, HP, and Samsung.
Think of it as a twofer of savings for your home and office — savings on the printer and on the ink!