Enrique Lores, CEO of HP, shared insights at the 40th Annual Strategic Decision Seminar by Bernstein last week regarding the Printing business. The overall picture has shown a continuous decline in revenue over several quarters.
Lores mentioned that in the office sector, the shift towards hybrid working has resulted in fewer people in the office, leading to a decrease in the number of printed pages. While not directly related to HP, this information indicates that HP found a reduction of up to 20% in printed pages compared to pre-pandemic levels.
When asked if the decreased printing in offices has been replaced by home printers, Lores stated that during the onset of the new wave of COVID-19 outbreaks, there was a surge in document printing at home. However, the numbers have now returned to a decline.
The trend of document printing is being pressured by two additional factors – cost reduction for organizations and environmental concerns. This poses a challenge for HP as in the past quarter, the Printing business revenue dropped by another 8% from 2023.
Nevertheless, HP sees a silver lining in the emerging trend. Historically, HP utilized a business model of selling loss-making printers and making profits from ink sales. However, with a decline in the usage of printers among the group that prints less and does not generate profits, HP has shifted its focus to pushing the All-in Plan model. This model offers printer and ink on a monthly subscription basis, which has proven to be profitable. Currently, HP has acquired 13 million customers under this subscription model.
TLDR: HP’s Printing business revenue has seen a decline, driven by factors like shifting work environments and environmental concerns. To adapt, HP has transitioned to a subscription-based model, attracting millions of customers.
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