During the crisis, cheaper may be more expensive

By Zatni Arbi

JAKARTA (JP): It's a familiar story. While printing out a term project, Anita ran out of ink for her eight-month-old Epson Stylus printer. Because she was pressed with a deadline, she went to a store in the nearby market to buy a new cartridge. She didn't really take a look at the box that the store owner handed to her, and she didn't even look at the packaging when she took the cartridge out.

The first 20 pages printed out quite well. Then she noticed more and more specks on the paper while the print itself became lighter. Before she knew it, there was black ink everywhere inside the printer. Luckily, she had printed most of her assignment; she realized that the store had given her a counterfeit ink cartridge. Now, who's going to clean up the mess? Not to worry, she thought. She still had four months remaining before the warranty of her Stylus printer expired.

Or did she?

When she took her printer to the repair center, she got an unpleasant little surprise. Because the problem was caused by a counterfeit cartridge, the warranty was void. She had to pay a handsome amount for the repair. And, her peril would be the same regardless of the brand of her printer, whether Epson, Canon or HP.

The problem of counterfeit ink cartridges has escalated so much that the three companies which represent the biggest three competitors in the printer market -- HP, Epson and Canon -- have held the first ever joint media conference asking the media's assistance to increase public awareness of the problem.

Competitors

The media event at the Grand Hyatt last month was unique. The three companies, i.e., Metrodata, Datascrip and HPSI, which normally fight each other for market shares, got together that afternoon and swore they would join hands in fighting counterfeit printer supplies (more commonly called consumables in the industry). The cooperation between the three competitors can certainly be taken as an indicator of how serious the problem is in Indonesia.

Currently, four different types of consumables are available on the market. First, of course, you can buy the original ribbon, ink or toner cartridge supplied by the respective vendors. Then there are third-party vendors who offer products under their own brands. Or, you can also buy do-it-yourself refill supplies and reuse your empty cartridges. Finally, there are counterfeit products.

The three vendors, understandably, never endorse the use of third-party products. However, the last category is really interesting as well as worth knowing about. On the market, you can get a refilled cartridge packaged in original boxes (some of those back stores buy empty original cartridges and boxes from end users and reuse them), you may get a refilled cartridge in fake boxes (and counterfeiters have been able to produce high- quality boxes that can befool even careful eyes), or original products in fake boxes.

"Almost every other retail store can offer you any one of these types," Paul Anthony, HP's Supplies Business Manager for Asia Pacific, told me in an exclusive interview prior to the press conference. Usually the stores will let you know if they have original product in fake boxes to offer.

The three companies shared the belief that consumers need to be warned of the consequence of knowingly or unknowingly using counterfeit printer supplies. First, as Anita found out, the warranty of the printers will not be honored if the damage is caused by the use of a counterfeit or low-quality ink cartridge.

Alarm bells

Has such a big concern about counterfeit products been prompted by the increasingly bigger bite into the market share of original products? While admitting that the sales of consumables represents a pretty significant percentage of the printer vendors' revenues, Paul explained that the initiative was taken particularly because the service divisions of the three companies had seen an alarming increase in the number of printers with damage caused by counterfeit or lower-quality ink products. The three big printer players then decided it was time to let the users know about it, hence the joint media conference.

One of the arguments for using lower-priced alternatives is obviously the cost, which has become more important as we sink deeper into the economic recession. By buying refilled products, printer users can save up to 70 percent on printing costs.

Wouldn't it be nice if, given the fact that we are in a bad economic condition, these printer vendors could help by lowering the prices of their consumable products sold in Indonesia so that we can once again afford to buy them? It is not that easy, because if the prices here in Indonesia were significantly lower than, say, in Singapore, most of the products intended for Indonesia would be reshipped and end up sitting on the shelves at Funan Center or Sim Lim Square instead.

"All we can do is add values to our customers," Paul said. HP, for example, gives away a disposable camera with the purchase of one ink cartridge. There were also redemption programs in the past where consumers could get some cash back for every original box that they brought back to HP.

Why not produce the ink and toner cartridges locally so that costs can be lowered? Unfortunately, that's not a feasible solution, either. "The precision level required in manufacturing the high-quality cartridges is so high that it is actually an extremely capital intensive industry," explained Paul.

"Worldwide, we only have four manufacturing facilities for ink cartridges. They are located in Singapore, Ireland, the U.S. and Puerto Rico. All toner cartridges sold in all parts of the world are essentially made in Japan."

The next solution would be to ask the printer makers to adopt the technology used for photocopiers. We wouldn't have to waste money on the printhead, and this could also help environment. Not quite, according to Paul. The printhead that we have now has a very limited lifetime. Therefore, for the best result, it has to be replaced at the same time we change the ink cartridge. The printer makers could make more durable printheads that would not corrode quickly, but that would lead to much higher prices.

However, the idea is not totally unusable. The US$599 HP DeskJet 2000C and the $999 DeskJet 2500C are the first inkjet printers in the world that use separate printhead and ink container.

"Yet, the printing head will still have to be replaced once in two years at the most," reminded Paul, "and the price of the head unit will be very expensive."

The DeskJet 2000C and 2500C are high-end printers, and as such, they already carry premium price tags. It should be clear now that the choice is between making a separate durable but far more expensive print head and ink tank or an affordable ink cartridge with a limited life printhead already built in, and the majority of the market still demands the second option.

So, what were the main messages from the joint press conference last month? Printer users do have alternatives that may save them some money, but if something goes wrong, they may lose the warranty for their new printers and may have to spend close to the price of a new unit just to get the printer repaired. More important than that is that we all should be aware that there are a lot of counterfeit products out there, and the best way to protect ourselves is to buy printer consumables from dealers, whether Canon, Epson or HP.