This Week in Imaging: A Look at New China Restrictions on HP

Photo credit: Kathy Wirth

The good news for HP Inc. was that, last week, the People’s Republic of China’s Ministry of Commerce approved HP’s pending acquisition of Samsung’s Printing Solutions business (now called S-Printing Solution Company). The bad news is that although China approved the deal, it approved it with some restrictions designed to discourage anti-competitive behavior – including the restriction that HP not sell HP A4 laser printers – which have about 50 percent market share in China – that aren’t compatible with third-party toner cartridges, or advertise its printers as being incompatible with third-party cartridges.

For HP, this is significant, as China’s economy is currently ranked as the world’s largest economy, according to both the IMF and the World Bank, and approximately 60 percent of HP Inc.’s revenues come from office printer supplies.

Interestingly, the restriction only appears to apply to A4 laser printers – there’s no mention of A3 copier/MFPs. Last year, market-research firm IDC pointed out that one of the key effects of HP’s Samsung printing business could be breaking up the A3 copier/MFP monopoly in China held by Japanese vendors Fuji Xerox, Canon, and Ricoh.

While China’s A3 copier base is admittedly small – making up only 6 percent of overall hardcopy shipments in China for the first half of 2016, according to IDC – its sales revenue accounted for a substantial 34 percent of the market.

For HP, set to introduce new HP-Samsung A3 copier/MFPs in China once the Samsung acquisition is completed, the silver lining seems to be that it won’t be restricted by China with its A3 offerings (at least for now). While it won’t be able to restrict use of third-party toner with its A4 laser printers, one way to get around that is to promote managed print services for its A4 offerings, as other vendors have done, locking-out third-party cartridges by – presumably – offering alluring deals that provide service and supplies under one contract. Meanwhile, HP could take substantial market share in China’s A3 market with its 16 new A3 models that it promises feature lower cost per page and service costs.

So, while China’s A4 restrictions will have some negative impact on HP in China, overall, its effects should be balanced out by its new expansion into China’s A3 market with innovative new HP-Samsung products.

Office-Imaging News

Canon U.S.A. Launches Nuance eCopy Compatibility for its Latest imageRUNNER ADVANCE Copier/MFPs – Read more here.

New Lexmark Document Capture for Military for Streamlining Paper-Based Processes – Read more here.

OKI Europe Launches Free Black-and-White Printing Promotion – Read more here.

Canon Celebrates 20th Anniversary of Document Scanning with Commemorative-Edition imageFORMULA Scanners – Read more here.

Canon’s New imageFORMULA DR-M260 Document Scanner Features Five-Year Warranty – Read more here.

Toshiba Canada to Provide PrintReleaf Reforestation Program for Platinum Customers – Read more here.

Brother Printers Exposed Online to Hackers, Says Security Researcher – Read more here.

A Look at HP’s New Connection Inspector Security Solution with Continuous Monitoring, Printer Self Healing – Read more here.

Legal News

China Warns HP: Don’t Make Printers Incompatible with Third-Party Cartridges – Read more here.

Commercial- and Production-Printing News

Konica Minolta Unveils New AccurioLabel 190 Press for European Market – Read more here.

EFI Launching New Signage, Textile, VUTek Commercial, Production Printers at SGIA Exp – Read more here.

HP Introduces New Textile Materials for Use with HP Latex Wide-Format Printers – Read more here.

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September 2017

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