TP, IBM go after HP cartridge business

TP, IBM go after HP cartridge business

TECH Pacific expects to generate millions of dollars for resellers through a new arrangement in the lucrative printing consumables market.

In April, the company won the exclusive rights to distribute IBM-made toner cartridges for Hewlett-Packard Laserjet printers in New Zealand. They’re expected to sell for 30% less than the HP equivalent.

With stock in the warehouse and a supply chain built, Tech Pacific is ready to begin marketing the range. It has appointed a business development manager, Sean Williams.

IBM launched the cartridges globally at the end of last year, says Jillian Maclean, of IBM Australia and New Zealand’s printing systems division.

It chose to take on market leader HP, and Maclean says while IBM might look for opportunities with other products, no plans are in the pipeline as yet.

The cartridge range represents a potential money-spinner for IBM, says Maclean, with the global cartridge market for the 18 monochrome Laserjet models worth $US6.5 billion a year.

Tech Pacific managing director Tony Butler believes the new line will significantly boost the company’s printing consumables business, which he says is already worth over $50 million a year.

Butler is also pleased that Tech Pacific, which distributes IBM PCs, servers and notebooks, although not exclusively, has the sole rights to the range.

“It is a nice position to be in when launching a brand and it has enabled us to invest in [Williams] to develop the range. I think it will be successful for the launch period of the product, as with New Zealand’s size, it does not help diluting the market.”

Maclean says the single distribution model was chosen to allow Tech Pacific to break the range into market.

“The exclusive arrangement ensures [the launch] is executed correctly to support our customers and channel partners,” she says.

Tech Pacific also deals in HP-branded printing consumables, but Butler does not expect the IBM range to impact negatively on that part of the business.

“We have a large number of brands within our portfolio and they do compete with each other, but it is business as usual,” he says.

Meanwhile, IT Wholesale, which was awarded the exclusive rights to the IBM range in Australia, declined to take on the line in New Zealand.

“We had just been appointed the HP consumables business and did not want to muddy the waters and did not see it [the IBM range] as a large market,” says ITW sales manager Tracey Condie.

Both Butler and Condie say printing consumables is a rapidly growing market in New Zealand, which they estimate is worth around $200 million a year.

HP New Zealand is not too concerned about IBM’s entry. Duncan Kirkman, supplies market development manager, says the company is confident customers will continue to rely on original replacement cartridges and will not be swayed by lower priced, and potentially lower quality, offerings.

“The price of printing goes deeper than the price of the cartridge and many customers rely on the quality and reliability of HP original cartridges,” he says.

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