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Other Inkjets Follow HP Into the Minilab Market; Dye-Sub Could Take A Hit

Jerry Lansky

Other Inkjets Follow HP Into the Minilab Market;
Dye-Sub Could Take A Hit

It didn't take a long-range radar system to spot what would happen next.

The creation of Phogenix by Hewlett-Packard and Kodak almost three years ago moved inkjet photo printing from its strongholds in home printing and wide-format commercial printing right into the retail photo scene. It had to come.

While the concept of inkjet in a retail lab environment could offer some advantages to the minilab business, it represents a huge potential to the inkjet manufacturers who sell consumables, both ink and paper. HP (including Compaq), for example, had revenues of almost $20 billion in its Imaging & Printing group last year. Fifty-three percent of this number represented the sales of consumables, according to a data gathering source. No small potatoes.

Home inkjets aren't being sold for $99 without a good reason: the follow-up consumable sales. Gillette could well have formulated this business model. Nevertheless, once HP, through Phogenix, opened up the eyes of its competitors to the potential of retail photo printing using inkjet technology, others were bound to pursue:

Epson: Had previously paired with Gretag on a product called Photo Hub (now being quietly interred), has now partnered with Noritsu on an inkjet minilab that could be a serious competitor to Phogenix. More details below.

DFX System Data Manager, part of the DFX system from Phogenix (Kodak, HP)

Konica: A large player in the office copier field, Konica has developed an inkjet printer that it is offering as an OEM system to various manufacturers of kiosks and other devices. There is no information to suggest it is planning to incorporate the system into a Konica minilabthough a chemical-free setup might well serve Konica's large cruise liner customer base. It employs pigment-based ink, unlike the HP dye-based inks. I understand the 'paper' is really an all-plastic medium and unique to the system. (Razor blades, anybody?) A heated roller seals the ink to the surface and by a very rapid change of temperature can deliver either a glossy or matte finished print. The system was shown at PMA-Orlando but not at photokina this past September. I've been told that the unit will output about 300-4R prints/hr., up to 12-inches wide, and will be considerably less expensive than the inkjet printer found in the Phogenix and Noritsu labs.

Chemical free inkjet systems: Noritsu, Epson: the dDP-411 Digital Dry Printer

Canon: A factor in both home and office copying. I have little information on a pigment based inkjet unit that I'm told Canon is developing in Japan and is planning to show at PMA. It will be suitable for use in various countertop applications though I'm told it will output only luster finish prints. Might be offered to the trade for about $6,000-$8,000.

My guess is that the onset of inkjet output at retail could put a real hurt on present systems that rely on dye-sublimation media for their images. This includes most of the present kiosks now available, including the Kodak Picture Maker and Digital Print Station products. The reason is not quality, for dye-sub quality seems to have been accepted by the consumer, but, rather, media cost.

I'm told that there are only a few manufacturers of the dye-sub medium. Such a condition would suggest minimum competition and a maximum price. A single 8x10 sheet of dye-sub paper carries a list price in the Kodak catalog of $2.05 per sheet, including ribbon. It has only come down a few cents in a number of years.

According to a Kodak spokesperson, sales volume of dye-sub paper last year was up 30% suggesting there was little reason to reduce pricing. Agfa, a re-seller of Sony dye-sub paper, prices at $1.70 an 8x10 sheet. The lowest dye-sub pricing I found was from Pixel Magic. One dealer told me he pays .22-cents for a 4x6 sheet. Look for dye-sub pricing to take a dive in direct proportion to the availability of inkjet.

The price of inkjet media is not so easy to pin down. Everyone is ducking this one because it will definitely be higher than silver halide, though much below dye-sub, which could cost between .4-.6 cents per 4x6 print for paper and chemicals depending on the clout of the buyer. One source tells me that the cost of a Phogenix dye-based ink print will be about .7 1/2-.8 cents per print, including print heads, laminate, ink and standard Kodak paper. Also, that the cost of a pigment ink print could be as much as .10-.15 cents a print because of the higher ink cost and the uniqueness of the paper. Whatever, it will impact systems committed to dye-sub.

In This Corner:

The New Kid on the Block

There is no question that the first head-to-head battle between manufacturers of inkjet minilabs is Phogenix vs. Noritsu.

In one corner is Phogenix, the product of two corporate giants, which announced an inkjet system almost three years ago at PMA. Starting a company from scratch and a new product from scratch is no mean chore. Phogenix folks have already missed some announced shipping dates as they continue to fine tune the firm's DFX system. At this writing only one model is in use at a retail beta site in San Diego (see sidebar). John Ward, VP and chief marketing officer, reported that by Dec. 31 another 30-40 will be in beta and firm orders will be taken for January and February delivery.

John said that some of the early problems with the system have been paper jamming and software matters that have now been overcome. He said the ink and media systems have been without problem. "Overall," he said, "we have not had any major problems that were unanticipated."

Four of the DFX units were running at photokina "all day long," according to John. One at the HP booth, two at Kodak and one in a back room for private presentation to customers. For the first time prints were being handed out to show-goers. In the past you could look at prints, but no sample, please.

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