HP CEO Enrique Lores has acknowledged the company’s ambition to transform the printing experience into a subscription model.
The revelation, in a recent CNBC interview, came amid a class-action lawsuit against the company relating to its printer firmware updates, which were shipped as security fixes but were later found to introduce printer blocking when using third-party cartridges.
The interview also reveals the company’s direction, with Lores indicating that other products, including PCs, should also come with a subscription model.
HP really wants you to subscribe to ink, and more
Subscription models have been proven to drive revenue by keeping customers more loyal for longer. The CNBC interview saw Lores confirm that the company’s printers are not profitable as one-time purchases, and that HP makes an undisclosed loss on many models.
The profit comes later on from Instant Ink subscriptions. Lores even alluded to the fact that the company wishes to get rid of unprofitable customers who do not subscribe.
Lores also defended the company’s actions, emphasizing the importance of protecting the company’s IP embedded in HP’s inks and printers. He revealed that viruses can be shared between cartridge and printer, and then to the network and beyond when using dodgy replacements.
HP’s CEO’s statements seem to align with the company’s broader strategy and other similar statements we’ve heard in recent months. Lores’ thoughts echo those of CFO Marie Myers, who last year emphasized the company’s big subscription push.
While HP defends its actions as a necessity for protecting IP and ensuring customer safety, part of the legal action discusses the significantly higher cost associated with genuine HP ink compared with third-party counterparts.
If HP were to go down the subscription route for its other products, surely this would add further complexities and enrage even more customers later on down the line.
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