Issue #0830/1 – In launching its new range of branded (but Lexmark-built) inkjet All-in-One printers, Dell has increased Total Cost of Printing to completely eliminate all the cost advantage it was so proud to claim when the company first introduced its own brand printer range. We check current costs of the new models against previous models and also against equivalent Lexmark devices.
This is an extraordinary move for Dell, and probably unprecedented in the industry, not so much in terms of the act of increasing Total Cost of Printing itself but in terms of the scale of the increase and the fact that Dell proudly announced that it would be “driving excess profit” out of the printer industry in whatever areas it could – starting with printer consumables.
In the early days of Dell branded printers, it was easy to demonstrate that Dell was actively achieving this goal (e.g. "New AiOs from Lexmark mark the focus for Lexmark in 2006"), with an advantage of up to 20% in long-term Total Cost of Printing not uncommon.
It is always hard for a manufacturer to increase prices on existing hardware and supplies, unless the increase is simply an exchange rate related adjustment. Dell has actually been quite rigorous about maintaining prices once set. Whereas other manufacturers (mainly US manufacturers but also some Japanese manufacturers to a lesser extent) adjust UK and European pricing according to movements in currency exchange rates, Dell has rarely changed the published price of any consumable product.
In fact, one of the few instances of Dell supplies price adjustments was as far back as April 2005 when some colour laser supplies prices were reduced to increase competitive pressure (see "Dell turns up the heat at the low end of the colour spectrum").
There has, however, been a recent minor increase in inkjet cartridge pricing – of 3%.
But, this is not where the radical increase in Total Cost of Printing has come from.
Rather than push prices up (which customers would notice immediately – no doubt expressing annoyance), Dell has taken the much more common and subtle approach of setting a new pricing structure on new cartridges for new printers at a much higher level than existing products.
This frequently comes in the form of a change in the amount of ink contained in the cartridges in order that the shelf price is not seen to be too different from the existing cartridge ranges. For instance, the cartridges for the new 948 AiO are priced at exactly the same level as cartridges for the existing 944 AiO. However, ink capacity is down by 15% and 40% (black/tricolour).
| Cartridge yield |
944 AiO January 2006 |
948 AiO September 2008 |
Change in cartridge yield |
|---|---|---|---|
| Black Cartridge | 553 | 470 | -15% |
| Tri-Colour Cartridge | 579 | 350 | -40% |
This reduction in ink volume has resulted in a massive increase in the cost of ink – 47%.
If we use pricing as it was in January 2006 for the 944 AiO and compare this with current pricing (September 2008) for the 948 AiO, the increase in real Total Cost of Printing to customers is, of course, even higher.
| Nominal CPP |
944 AiO January 2006 |
948 AiO September 2008 |
Change in nominal CPP |
|---|---|---|---|
| Black cartridge | 2.98 pence | 3.61 pence | +21% |
| Tri-Colour Cartridge | 4.84 pence | 8.28 pence | +71% |
| 4-Colour printing | 7.82 pence | 11.90 pence | +52% |
Dell 944 AiO
Total Cost of Printing - Dell vs Lexmark Inkjet AiO
Note that for this level of machine, the mixed mono/colour CPP over three years shown in the accompanying table is calculated on the basis of 250 pages per month; 70% pages in mono and 30% pages in colour; is based on the use of maximum capacity supplies; takes into account any standard, or starter, supplies shipped with the device; and also includes the cost of purchase. Prices are average price including tax.
Dell 948 AiONote how expensive colour printing is per page compared with the Lexmark machine. This completely counteracts the minimal benefit of a lower mono CPP and the aggressive hardware purchase price of the Dell 948, which is some 37% lower than the Lexmark X5650.
Clearly, with such a high nominal colour CPP, increasing the number of pages printed, and/or the proportion of colour pages that are printed, and Dell costs climb through the roof, as demonstrated in the chart below.
Total Cost of Printing - Dell vs Lexmark Inkjet AiO
This can only be described as a dire situation for potential new Dell customers – I would certainly not wish to be one of them! Those who have experience of Dell printers already, especially business users, and are thinking of updating their hardware, will be shocked rigid when they discover the disadvantage of buying new models.
Lexmark X5650This represents a saving of some 27% over buying and running the Lexmark X5650, at the low street price position, or a massive 43% over the Dell 948w AiO!! And, there is a saving to be made on the hardware purchase!
There are no prizes for recognising which device represents the best value for money - sorry!
~End~
