Poldy

*As*of*Friday,*November*19,*2004* ****

PAGE ONE

Photo Finish
As Cameras Go Digital, a Race
To Shape Habits of Consumers
H-P, Retailers, Online Outfits
Scramble for Upper Hand
In Lucrative Print Business
The Benefit of Extra Nozzles

By PUI-WING TAM
Staff Reporter of THE WALL STREET JOURNAL
November*19,*2004;*Page*A1


Like millions of other Americans, Julie Berry got a digital camera this
year. What the 35-year-old stay-at-home mom does with the pictures is
the subject of the next big battle over the future of photography.

After snapping shots of her 2-year-old daughter, Ginger, Ms. Berry
printed them out in her study -- and was disappointed. "The photos just
didn't have great color or great resolution," she says. "I just thought:
'Oh well, I guess we have to buy a better printer.'*"

A few weeks later, Ms. Berry had more luck at the digital printing kiosk
at the CVS Corp. pharmacy near her home in Mansfield, Mass. On her first
try, Ms. Berry produced 30 digital prints for 29 cents a pop in less
than half an hour. Now, she's a convert. "It's easy and it's very
reasonably priced," she says, "especially considering I don't want to
spend time and money and run out to buy a new printer."

CAST YOUR VOTE


Question of the Day: How do you develop your digital photos?

The switch to digital cameras has already brought sweeping change to the
$85 billion photography business. Eastman Kodak Co., the big film
company, saw its business drop off and is struggling to adjust. Camera
makers found a hot new product. Now, the next battlefield is rapidly
taking shape: Printer makers like Hewlett-Packard Co. are in a fierce
struggle with big retailers like CVS and Wal-Mart Stores Inc. as well as
upstart Web sites to capture consumers while their habits for printing
digital pictures are still in flux.

The stakes are high for retailers, who have long benefited from the foot
traffic and profits generated by the $5.3 billion U.S. film-processing
business. Wal-Mart stores brought in a hefty $3.5 billion in revenue
from photo processing in the last fiscal year, or 2% of store revenue.
They are even higher for H-P. While printing accounts for 30% of H-P's
revenue, it generates 75% of the company's profit. H-P has been counting
on printing color photos at home to keep the ink flowing for years to
come.



See Consumer Reports' guide and ratings of online photo-finishing.

For a while, H-P dominated the market. As recently as 2002, 91% of
digital photos printed in the U.S. were produced on a home or office
printer, according to research firm IDC. With more than 40% of the
consumer inkjet-printer market, H-P was sitting pretty.

Now, the big retailers are rapidly pushing into digital-photo printing,
with do-it-yourself kiosks and drop-off centers. They are challenging
H-P with TV ads and promotional campaigns attacking the cost and
complexity of home printing. A new crop of online photo sites promises
consumers professional digital images without leaving home.

While printing at home still typically costs 60 cents for a 4-by-6
image, including the costs of ink and paper, big retailers generally
charge below 30 cents and some online sites charge less than 20 cents.

The result: This year, IDC predicts only about 69% of printed digital
photos will emerge from home printers like H-P's. By 2007, it projects
that figure will fall to 42% -- albeit in a much bigger digital photo
market.


Now, H-P is urgently shifting its strategy to recapture Ms. Berry and
others like her. When H-P entered the digital-photo business nearly a
decade ago, it worried most about matching the quality of film snapshots
-- developing machines that could create high-quality images, but only
slowly and at fairly hefty prices.

Since taking over five years ago, H-P Chief Executive Carly Fiorina has
invested more than $1 billion in new digital-photography products,
including cameras and portable photo-printers. Today the company is
betting that the convenience and instant gratification of home printing
will triumph over the hassle of traveling to a store. H-P is aiming to
cut in half, to 30 seconds, the time to print a 4-by-6 image. It's
testing cheaper paper and ink. And it's trying to simplify the task of
printing images directly from camera-cellphones by developing software
that easily sends an image to a printer.

"This is absolutely a big bet for us," says Vyomesh "VJ" Joshi, H-P's
executive vice president for printing and imaging. "Retailers are
usually one of the slower groups to respond, but they suddenly woke up.
So we have to get more aggressive."

Two years after H-P completed its $19 billion acquisition of Compaq
Computer Corp., the company is struggling to deliver consistent growth.
Protecting its printing cash cow is critical to doing that. Analysts
estimate that ink cartridges carry a gross profit margin -- sales price
minus the cost to make the cartridge -- of more than 60%. That's far
higher than the margins on H-P's personal computers, standardized
server-computers and other products. H-P sells most of its printers at a
loss, planning to make up the difference on ink sales. Photo printing is
especially lucrative, because pictures consume 20 times as much ink as
printing a page of text. H-P's color inkjet cartridges generally cost
between $19 and $35.


Unlike traditional film, which requires consumers to print out a picture
before they can see the image, digital cameras allow users to delete an
image they don't like and then crop, edit and enhance images they want
to keep.

Printing those pictures is a big growth opportunity for H-P, as digital
cameras move from high-end gadget to mass phenomenon. Sales of film in
the U.S. peaked at $6.2 billion in 2000. Last year, film sales totaled
$5.3 billion, down 13%. Meanwhile, 66 million digital cameras will be
sold this year, up from 12 million in 2000, predicts InfoTrends Research
Group Inc.

Others covet those images as well. Online photography sites like
Snapfish, the online arm of District Photo Inc., and closely held
Shutterfly Inc. will print digital photos for 29 cents or less -- under
20 cents for those who prepay -- and mail them to customers in a day or
two. Yahoo Inc., which started a similar site in 2000, sells prints for
19 cents, and recently offered 100 free prints to new subscribers to its
high-speed Internet service.

The biggest challenge comes from large retailers that are offering to
usher consumers into this unfamiliar world with a familiar routine:
Bring us your digital images, and we'll give you professional-looking
finished prints. Even retailers that sell H-P printers, such as Best Buy
Co. and CompUSA Inc., are beginning to compete with H-P by offering
digital-photo services in their stores.

For retailers, digital printing is a rich new vein. Traditional prints
require the extra step of exposing a negative through a chemical
process, and retailers can charge only about 15 cents a print because
there is still so much competition in the field. Digital prints, which
essentially involve only the cost of ink and paper, are currently
commanding about 29 cents, meaning gross margins are higher.

In pitching their services, retailers focus on price and simplicity.
Walgreen Co. proclaims on posters in its stores that its 29-cent prints
are cheaper than home printing. CVS runs TV and print ads showing
digital photos being printed while consumers shop for other items.
Wal-Mart sells H-P printers but increasingly emphasizes its own
digital-photo service, at 24 cents a print. By the end of the year,
Wal-Mart expects to offer digital-photo processing in more than 3,000 of
its more than 3,600 stores and wholesale clubs.

The roots of this clash stretch back to the mid-1990s, when film still
ruled the day. In 1995, 640 million rolls of film were sold in the U.S.,
for $4.9 billion. Consumers' habits were entrenched: They snapped
photos, took the film to a nearby store and got prints. Digital cameras
were still expensive -- $650 and up -- and couldn't produce detailed
images.

But H-P looked ahead and saw that affordable digital cameras would soon
produce high-quality images. Hoping to expand the use of its consumer
printers and to sell more ink, H-P in 1995 began building specialized
photo printers. The company concentrated on making these printers work
well with high-quality inks and paper so that home-printed digital
images would retain the gloss of traditional film prints.

H-P's future competitors also calculated ahead. Makers of
film-processing equipment for big retailers like Wal-Mart and Costco
Wholesale Corp. began to go digital. In 1996, Fuji Photo Film Co.
released a digital lab for retailers. Noritsu America Corp. followed in
1999. "We were betting the mass audience would return to its old
photofinishing habits," says Paul D'Andrea, a Fuji senior vice president.

Kodak, meanwhile, is trying to play it all ways in the digital
photography world. As it shifts away from its traditional film business,
the company is developing photo printers and digital cameras of its own.
It has also put a stake in the online digital image market with its
popular Ofoto Web site, which charges 29 cents per print. Kodak also
sells do-it-yourself digital printing kiosks and other photofinishing
equipment to retailers.

In 2000, Wal-Mart executives studying camera sales realized consumers
were switching to digital cameras more quickly than they had projected.
So in 2001, Wal-Mart began converting its photo services to
digital-photo equipment. The retail giant stressed convenience, allowing
customers to drop off digital-camera memory cards and return for
finished prints, just as they had done with traditional film. It has
also created an online service that mails prints to users, or allows
them to come to the store to pick the photos up. "We want to make
digital-photo printing as easy as going to an ATM," says Dave Rogers,
Wal-Mart's vice president of photo centers.

The traditional film developers also attacked home printing on price. In
2001, Costco started offering digital prints for 19 cents each. The next
year, Wal-Mart cut its standard price to 24 cents, from 29 cents. "If
you really understand what it costs to print photos at home, plus all
the extra time involved, then people will see it's a good deal to print
in stores instead," says Mr. Rogers.

The price cuts triggered alarm bells at H-P, which until then hadn't
needed to worry much about the minimal competition. At the time, H-P
estimated that home prints cost roughly 60 cents each, including the
price of ink and paper. Consumer focus groups revealed another problem:
Home printing was slow, consuming 60 to 65 seconds to print a 4-by-6
image, compared with as little as six seconds at some retail photo
kiosks.

So H-P shifted to making home printing easier. In 2002, H-P introduced
printers with slots for the memory cards that store images in a digital
camera, eliminating the need to transfer photos to a computer before
printing. In a speech that year, Ms. Fiorina said that H-P had
streamlined the process for capturing, storing, sharing and printing
images to three steps, down from 57.

In 2003, HP's Mr. Joshi pulled the plug on a joint venture with Kodak
that was building digital-processing equipment for retailers, refocusing
on home printers and allowing him to redeploy 150 people and several
million dollars in spending toward the effort. In August 2003, he
gathered a dozen lieutenants in his San Diego office and delivered clear
marching orders. "Your mission in life is to make home printing mass
market," Mr. Joshi says he told the group. "We have to capture every
home print we can."

To speed printing, H-P increased the number of nozzles on an ink-jet
head, cutting printing time to 40 seconds from 60 seconds. To address
consumer fears of complexity, the company last year held 4,000 training
sessions to show retail salespeople how quickly H-P's printers can churn
out a photo. H-P also created kiosks, now being installed at retailers,
where consumers can test cameras and printers.

To tackle the cost of home printing, H-P focused first on paper. H-P had
been using paper from expensive specialty mills. Then, last year, H-P
executives say they figured out how to make photo-quality paper at a
cheaper mass-market mill in Europe, slashing the consumer's price for a
4-by-6 sheet of photo paper to 10 cents, from 30 cents.

Trimming the cost of ink was a more delicate task, because the company
relied so heavily on ink profits. So it borrowed a trick from
cereal-makers, reducing cartridge prices by putting less ink inside, and
making the cost of ink overall appear cheaper. "If we put in a lot of
ink and lower the price of the cartridge, we can't make money," says
Boris Elisman, H-P's vice president of supplies marketing and sales.

H-P also began searching for ways to tap the booming market for
cellphones with cameras. Executives feared camera-phones would encourage
consumers to snap and e-mail images without ever printing them. So H-P
dispatched employees to interview camera-phone users in Europe and
Japan, who said they would print images more often if they could do so
by pushing a single button on their phones.

Soon after, H-P agreed to develop printing software to transmit images
from phones made by Finland's Nokia Corp. This past February, H-P, Canon
Inc. and Seiko Epson Corp. agreed to cooperate on technology standards
to make it easier for consumers to print images from many types of
camera-phones.

Now H-P is trying another price-cutting strategy, offering a discount to
consumers who buy paper and ink together. In August, H-P began selling a
bundle of 280 sheets of photo paper and two cartridges for $80, down
from $150 if the items are purchased separately. H-P says the
combination reduces the cost of a 4-by-6 digital print to 29 cents, from
60 cents.

Consumers are still trying to find a new digital routine. Ana Scofield,
a travel writer based in St. Paul, Minn., received a new H-P digital
camera from her fianc over the summer. She began snapping pictures of
her two teenage children immediately, and to her delight, was able to
print the photos out at home on the H-P printer that had come bundled
with the digital camera.

But because of the costs and hassles of buying new printer cartridges,
she plans to split her printing between H-P and the retailers. "I'll
print pictures that I want right away at home," says Ms. Scofield. "But
for multiple copies, I'll definitely go to someone else."

Calif Bill

I take the card to Costco and they do it for $0.19 a print. I can not print
them at home for this cost. Wal-mart is 24 cents. Paper costs me more than
this. And overall the cost is much less than film. As you only print the
pictures you want. And on a trip, my wife erases the pictures, that look
bad. These would be printed and discarded with film.
Bill

"poldy" <[email protected]> wrote in message
news:[email protected]...
    > As of Friday, November 19, 2004
    > PAGE ONE
    > Photo Finish
    > As Cameras Go Digital, a Race
    > To Shape Habits of Consumers
    > H-P, Retailers, Online Outfits
    > Scramble for Upper Hand
    > In Lucrative Print Business
    > The Benefit of Extra Nozzles
    > By PUI-WING TAM
    > Staff Reporter of THE WALL STREET JOURNAL
    > November 19, 2004; Page A1
    > Like millions of other Americans, Julie Berry got a digital camera this
    > year. What the 35-year-old stay-at-home mom does with the pictures is
    > the subject of the next big battle over the future of photography.
    > After snapping shots of her 2-year-old daughter, Ginger, Ms. Berry
    > printed them out in her study -- and was disappointed. "The photos just
    > didn't have great color or great resolution," she says. "I just thought:
    > 'Oh well, I guess we have to buy a better printer.' "
    > A few weeks later, Ms. Berry had more luck at the digital printing kiosk
    > at the CVS Corp. pharmacy near her home in Mansfield, Mass. On her first
    > try, Ms. Berry produced 30 digital prints for 29 cents a pop in less
    > than half an hour. Now, she's a convert. "It's easy and it's very
    > reasonably priced," she says, "especially considering I don't want to
    > spend time and money and run out to buy a new printer."
    > CAST YOUR VOTE
    > Question of the Day: How do you develop your digital photos?
    > The switch to digital cameras has already brought sweeping change to the
    > $85 billion photography business. Eastman Kodak Co., the big film
    > company, saw its business drop off and is struggling to adjust. Camera
    > makers found a hot new product. Now, the next battlefield is rapidly
    > taking shape: Printer makers like Hewlett-Packard Co. are in a fierce
    > struggle with big retailers like CVS and Wal-Mart Stores Inc. as well as
    > upstart Web sites to capture consumers while their habits for printing
    > digital pictures are still in flux.
    > The stakes are high for retailers, who have long benefited from the foot
    > traffic and profits generated by the $5.3 billion U.S. film-processing
    > business. Wal-Mart stores brought in a hefty $3.5 billion in revenue
    > from photo processing in the last fiscal year, or 2% of store revenue.
    > They are even higher for H-P. While printing accounts for 30% of H-P's
    > revenue, it generates 75% of the company's profit. H-P has been counting
    > on printing color photos at home to keep the ink flowing for years to
    > come.
    > See Consumer Reports' guide and ratings of online photo-finishing.
    > For a while, H-P dominated the market. As recently as 2002, 91% of
    > digital photos printed in the U.S. were produced on a home or office
    > printer, according to research firm IDC. With more than 40% of the
    > consumer inkjet-printer market, H-P was sitting pretty.
    > Now, the big retailers are rapidly pushing into digital-photo printing,
    > with do-it-yourself kiosks and drop-off centers. They are challenging
    > H-P with TV ads and promotional campaigns attacking the cost and
    > complexity of home printing. A new crop of online photo sites promises
    > consumers professional digital images without leaving home.
    > While printing at home still typically costs 60 cents for a 4-by-6
    > image, including the costs of ink and paper, big retailers generally
    > charge below 30 cents and some online sites charge less than 20 cents.
    > The result: This year, IDC predicts only about 69% of printed digital
    > photos will emerge from home printers like H-P's. By 2007, it projects
    > that figure will fall to 42% -- albeit in a much bigger digital photo
    > market.
    > Now, H-P is urgently shifting its strategy to recapture Ms. Berry and
    > others like her. When H-P entered the digital-photo business nearly a
    > decade ago, it worried most about matching the quality of film snapshots
    > -- developing machines that could create high-quality images, but only
    > slowly and at fairly hefty prices.
    > Since taking over five years ago, H-P Chief Executive Carly Fiorina has
    > invested more than $1 billion in new digital-photography products,
    > including cameras and portable photo-printers. Today the company is
    > betting that the convenience and instant gratification of home printing
    > will triumph over the hassle of traveling to a store. H-P is aiming to
    > cut in half, to 30 seconds, the time to print a 4-by-6 image. It's
    > testing cheaper paper and ink. And it's trying to simplify the task of
    > printing images directly from camera-cellphones by developing software
    > that easily sends an image to a printer.
    > "This is absolutely a big bet for us," says Vyomesh "VJ" Joshi, H-P's
    > executive vice president for printing and imaging. "Retailers are
    > usually one of the slower groups to respond, but they suddenly woke up.
    > So we have to get more aggressive."
    > Two years after H-P completed its $19 billion acquisition of Compaq
    > Computer Corp., the company is struggling to deliver consistent growth.
    > Protecting its printing cash cow is critical to doing that. Analysts
    > estimate that ink cartridges carry a gross profit margin -- sales price
    > minus the cost to make the cartridge -- of more than 60%. That's far
    > higher than the margins on H-P's personal computers, standardized
    > server-computers and other products. H-P sells most of its printers at a
    > loss, planning to make up the difference on ink sales. Photo printing is
    > especially lucrative, because pictures consume 20 times as much ink as
    > printing a page of text. H-P's color inkjet cartridges generally cost
    > between $19 and $35.
    > Unlike traditional film, which requires consumers to print out a picture
    > before they can see the image, digital cameras allow users to delete an
    > image they don't like and then crop, edit and enhance images they want
    > to keep.
    > Printing those pictures is a big growth opportunity for H-P, as digital
    > cameras move from high-end gadget to mass phenomenon. Sales of film in
    > the U.S. peaked at $6.2 billion in 2000. Last year, film sales totaled
    > $5.3 billion, down 13%. Meanwhile, 66 million digital cameras will be
    > sold this year, up from 12 million in 2000, predicts InfoTrends Research
    > Group Inc.
    > Others covet those images as well. Online photography sites like
    > Snapfish, the online arm of District Photo Inc., and closely held
    > Shutterfly Inc. will print digital photos for 29 cents or less -- under
    > 20 cents for those who prepay -- and mail them to customers in a day or
    > two. Yahoo Inc., which started a similar site in 2000, sells prints for
    > 19 cents, and recently offered 100 free prints to new subscribers to its
    > high-speed Internet service.
    > The biggest challenge comes from large retailers that are offering to
    > usher consumers into this unfamiliar world with a familiar routine:
    > Bring us your digital images, and we'll give you professional-looking
    > finished prints. Even retailers that sell H-P printers, such as Best Buy
    > Co. and CompUSA Inc., are beginning to compete with H-P by offering
    > digital-photo services in their stores.
    > For retailers, digital printing is a rich new vein. Traditional prints
    > require the extra step of exposing a negative through a chemical
    > process, and retailers can charge only about 15 cents a print because
    > there is still so much competition in the field. Digital prints, which
    > essentially involve only the cost of ink and paper, are currently
    > commanding about 29 cents, meaning gross margins are higher.
    > In pitching their services, retailers focus on price and simplicity.
    > Walgreen Co. proclaims on posters in its stores that its 29-cent prints
    > are cheaper than home printing. CVS runs TV and print ads showing
    > digital photos being printed while consumers shop for other items.
    > Wal-Mart sells H-P printers but increasingly emphasizes its own
    > digital-photo service, at 24 cents a print. By the end of the year,
    > Wal-Mart expects to offer digital-photo processing in more than 3,000 of
    > its more than 3,600 stores and wholesale clubs.
    > The roots of this clash stretch back to the mid-1990s, when film still
    > ruled the day. In 1995, 640 million rolls of film were sold in the U.S.,
    > for $4.9 billion. Consumers' habits were entrenched: They snapped
    > photos, took the film to a nearby store and got prints. Digital cameras
    > were still expensive -- $650 and up -- and couldn't produce detailed
    > images.
    > But H-P looked ahead and saw that affordable digital cameras would soon
    > produce high-quality images. Hoping to expand the use of its consumer
    > printers and to sell more ink, H-P in 1995 began building specialized
    > photo printers. The company concentrated on making these printers work
    > well with high-quality inks and paper so that home-printed digital
    > images would retain the gloss of traditional film prints.
    > H-P's future competitors also calculated ahead. Makers of
    > film-processing equipment for big retailers like Wal-Mart and Costco
    > Wholesale Corp. began to go digital. In 1996, Fuji Photo Film Co.
    > released a digital lab for retailers. Noritsu America Corp. followed in
    > 1999. "We were betting the mass audience would return to its old
    > photofinishing habits," says Paul D'Andrea, a Fuji senior vice president.
    > Kodak, meanwhile, is trying to play it all ways in the digital
    > photography world. As it shifts away from its traditional film business,
    > the company is developing photo printers and digital cameras of its own.
    > It has also put a stake in the online digital image market with its
    > popular Ofoto Web site, which charges 29 cents per print. Kodak also
    > sells do-it-yourself digital printing kiosks and other photofinishing
    > equipment to retailers.
    > In 2000, Wal-Mart executives studying camera sales realized consumers
    > were switching to digital cameras more quickly than they had projected.
    > So in 2001, Wal-Mart began converting its photo services to
    > digital-photo equipment. The retail giant stressed convenience, allowing
    > customers to drop off digital-camera memory cards and return for
    > finished prints, just as they had done with traditional film. It has
    > also created an online service that mails prints to users, or allows
    > them to come to the store to pick the photos up. "We want to make
    > digital-photo printing as easy as going to an ATM," says Dave Rogers,
    > Wal-Mart's vice president of photo centers.
    > The traditional film developers also attacked home printing on price. In
    > 2001, Costco started offering digital prints for 19 cents each. The next
    > year, Wal-Mart cut its standard price to 24 cents, from 29 cents. "If
    > you really understand what it costs to print photos at home, plus all
    > the extra time involved, then people will see it's a good deal to print
    > in stores instead," says Mr. Rogers.
    > The price cuts triggered alarm bells at H-P, which until then hadn't
    > needed to worry much about the minimal competition. At the time, H-P
    > estimated that home prints cost roughly 60 cents each, including the
    > price of ink and paper. Consumer focus groups revealed another problem:
    > Home printing was slow, consuming 60 to 65 seconds to print a 4-by-6
    > image, compared with as little as six seconds at some retail photo
    > kiosks.
    > So H-P shifted to making home printing easier. In 2002, H-P introduced
    > printers with slots for the memory cards that store images in a digital
    > camera, eliminating the need to transfer photos to a computer before
    > printing. In a speech that year, Ms. Fiorina said that H-P had
    > streamlined the process for capturing, storing, sharing and printing
    > images to three steps, down from 57.
    > In 2003, HP's Mr. Joshi pulled the plug on a joint venture with Kodak
    > that was building digital-processing equipment for retailers, refocusing
    > on home printers and allowing him to redeploy 150 people and several
    > million dollars in spending toward the effort. In August 2003, he
    > gathered a dozen lieutenants in his San Diego office and delivered clear
    > marching orders. "Your mission in life is to make home printing mass
    > market," Mr. Joshi says he told the group. "We have to capture every
    > home print we can."
    > To speed printing, H-P increased the number of nozzles on an ink-jet
    > head, cutting printing time to 40 seconds from 60 seconds. To address
    > consumer fears of complexity, the company last year held 4,000 training
    > sessions to show retail salespeople how quickly H-P's printers can churn
    > out a photo. H-P also created kiosks, now being installed at retailers,
    > where consumers can test cameras and printers.
    > To tackle the cost of home printing, H-P focused first on paper. H-P had
    > been using paper from expensive specialty mills. Then, last year, H-P
    > executives say they figured out how to make photo-quality paper at a
    > cheaper mass-market mill in Europe, slashing the consumer's price for a
    > 4-by-6 sheet of photo paper to 10 cents, from 30 cents.
    > Trimming the cost of ink was a more delicate task, because the company
    > relied so heavily on ink profits. So it borrowed a trick from
    > cereal-makers, reducing cartridge prices by putting less ink inside, and
    > making the cost of ink overall appear cheaper. "If we put in a lot of
    > ink and lower the price of the cartridge, we can't make money," says
    > Boris Elisman, H-P's vice president of supplies marketing and sales.
    > H-P also began searching for ways to tap the booming market for
    > cellphones with cameras. Executives feared camera-phones would encourage
    > consumers to snap and e-mail images without ever printing them. So H-P
    > dispatched employees to interview camera-phone users in Europe and
    > Japan, who said they would print images more often if they could do so
    > by pushing a single button on their phones.
    > Soon after, H-P agreed to develop printing software to transmit images
    > from phones made by Finland's Nokia Corp. This past February, H-P, Canon
    > Inc. and Seiko Epson Corp. agreed to cooperate on technology standards
    > to make it easier for consumers to print images from many types of
    > camera-phones.
    > Now H-P is trying another price-cutting strategy, offering a discount to
    > consumers who buy paper and ink together. In August, H-P began selling a
    > bundle of 280 sheets of photo paper and two cartridges for $80, down
    > from $150 if the items are purchased separately. H-P says the
    > combination reduces the cost of a 4-by-6 digital print to 29 cents, from
    > 60 cents.
    > Consumers are still trying to find a new digital routine. Ana Scofield,
    > a travel writer based in St. Paul, Minn., received a new H-P digital
    > camera from her fianc over the summer. She began snapping pictures of
    > her two teenage children immediately, and to her delight, was able to
    > print the photos out at home on the H-P printer that had come bundled
    > with the digital camera.
    > But because of the costs and hassles of buying new printer cartridges,
    > she plans to split her printing between H-P and the retailers. "I'll
    > print pictures that I want right away at home," says Ms. Scofield. "But
    > for multiple copies, I'll definitely go to someone else."

Mxsmanic

poldy writes:

    > Like millions of other Americans, Julie Berry got a digital camera this
    > year. What the 35-year-old stay-at-home mom does with the pictures is
    > the subject of the next big battle over the future of photography.
    >
    > After snapping shots of her 2-year-old daughter, Ginger, Ms. Berry
    > printed them out in her study -- and was disappointed. "The photos just
    > didn't have great color or great resolution," she says. "I just thought:
    > 'Oh well, I guess we have to buy a better printer.'*"
    >
    > A few weeks later, Ms. Berry had more luck at the digital printing kiosk
    > at the CVS Corp. pharmacy near her home in Mansfield, Mass. On her first
    > try, Ms. Berry produced 30 digital prints for 29 cents a pop in less
    > than half an hour. Now, she's a convert. "It's easy and it's very
    > reasonably priced," she says, "especially considering I don't want to
    > spend time and money and run out to buy a new printer."

Newbies in digital photography rapidly discover that the only way to get
nice prints is to take the digital photos to a lab. So-called digital
cameras only simplify the taking of pictures; they do not provide better
pictures, and they certainly do not make it possible to replace photo
labs for getting quality prints.

    > The switch to digital cameras has already brought sweeping change to the
    > $85 billion photography business. Eastman Kodak Co., the big film
    > company, saw its business drop off and is struggling to adjust. Camera
    > makers found a hot new product. Now, the next battlefield is rapidly
    > taking shape: Printer makers like Hewlett-Packard Co. are in a fierce
    > struggle with big retailers like CVS and Wal-Mart Stores Inc. as well as
    > upstart Web sites to capture consumers while their habits for printing
    > digital pictures are still in flux.

The printer makers will lose. It's much easier and cheaper to get
prints from a lab, and the prints look a lot nicer. Photo printing
technology is extraordinarily complex and expensive, and that isn't
likely to change any time soon.

    > The stakes are high for retailers, who have long benefited from the foot
    > traffic and profits generated by the $5.3 billion U.S. film-processing
    > business. Wal-Mart stores brought in a hefty $3.5 billion in revenue
    > from photo processing in the last fiscal year, or 2% of store revenue.

Photo labs will continue to make money from printing services. There
many be some decline in film development over time, although film is
doing much better than many people seem to want to believe.

    > They are even higher for H-P. While printing accounts for 30% of H-P's
    > revenue, it generates 75% of the company's profit. H-P has been counting
    > on printing color photos at home to keep the ink flowing for years to
    > come.

That's because ink and paper have 90% profit margins. But that also
makes it uneconomical to print photos at home, and once a consumer
discovers this, the printer is abandoned. Worse yet, the
hyper-expensive prints one gets from a home photo printer look a lot
worse than prints from a Fuji Frontier at a photo lab.

    > For a while, H-P dominated the market. As recently as 2002, 91% of
    > digital photos printed in the U.S. were produced on a home or office
    > printer, according to research firm IDC. With more than 40% of the
    > consumer inkjet-printer market, H-P was sitting pretty.

That may not last. Home printing appeals to gadget-lovers, but not to
the average Mom and Pop.

    > Now, the big retailers are rapidly pushing into digital-photo printing,
    > with do-it-yourself kiosks and drop-off centers. They are challenging
    > H-P with TV ads and promotional campaigns attacking the cost and
    > complexity of home printing. A new crop of online photo sites promises
    > consumers professional digital images without leaving home.

I suspect they will eventually succeed, unless some sort of miracle
occurs in home photo printing.

    > The result: This year, IDC predicts only about 69% of printed digital
    > photos will emerge from home printers like H-P's. By 2007, it projects
    > that figure will fall to 42% -- albeit in a much bigger digital photo
    > market.

That sounds reasonable to me.

    > Since taking over five years ago, H-P Chief Executive Carly Fiorina has
    > invested more than $1 billion in new digital-photography products,
    > including cameras and portable photo-printers. Today the company is
    > betting that the convenience and instant gratification of home printing
    > will triumph over the hassle of traveling to a store.

HP doesn't understand the market, then. If traveling to a store were
that much of a hassle, people would have started shooting Polaroids
decades ago. But Polaroids never made much of a dent, for reasons very
similar to consumer wariness of home printing. The fact is, it's just
not that much of a hassle to go to a store; people already have to go to
the store for other things, so getting a few prints is easy.

Indeed, this is why film is still doing fine. Development is only one
additional step and is almost invisible in many cases.

    > H-P is aiming to
    > cut in half, to 30 seconds, the time to print a 4-by-6 image. It's
    > testing cheaper paper and ink. And it's trying to simplify the task of
    > printing images directly from camera-cellphones by developing software
    > that easily sends an image to a printer.

It's a waste of time. They're so greedy for the money that they don't
see the obvious problems with this point of view.

    > Analysts
    > estimate that ink cartridges carry a gross profit margin -- sales price
    > minus the cost to make the cartridge -- of more than 60%.

And that's one of the things that will kill home printing.

    > Photo printing is
    > especially lucrative, because pictures consume 20 times as much ink as
    > printing a page of text. H-P's color inkjet cartridges generally cost
    > between $19 and $35.

And so printing photos at home costs a fortune. With good paper and
ink, it costs me several dollars to produce an 8x10 print at home. A
print from a lab is cheaper _and_ of better quality, and I can have it
in 15 minutes, which is less time than it takes to print it at home.

    > For retailers, digital printing is a rich new vein. Traditional prints
    > require the extra step of exposing a negative through a chemical
    > process, and retailers can charge only about 15 cents a print because
    > there is still so much competition in the field. Digital prints, which
    > essentially involve only the cost of ink and paper, are currently
    > commanding about 29 cents, meaning gross margins are higher.

The article is misunderstanding something here. A lot of retail prints
are made chemically, with high-tech machines like the Fuji Frontier.
This is why they are superior to home prints. It's not any more
expensive (in large volumes), but it looks a lot nicer. These are not
just glorified ink-jet printers; the technology is entirely different.

    > In pitching their services, retailers focus on price and simplicity.
    > Walgreen Co. proclaims on posters in its stores that its 29-cent prints
    > are cheaper than home printing.

They're right.

    > In 2003, HP's Mr. Joshi pulled the plug on a joint venture with Kodak
    > that was building digital-processing equipment for retailers, refocusing
    > on home printers and allowing him to redeploy 150 people and several
    > million dollars in spending toward the effort. In August 2003, he
    > gathered a dozen lieutenants in his San Diego office and delivered clear
    > marching orders. "Your mission in life is to make home printing mass
    > market," Mr. Joshi says he told the group. "We have to capture every
    > home print we can."

He may come to regret those words.

    > Trimming the cost of ink was a more delicate task, because the company
    > relied so heavily on ink profits. So it borrowed a trick from
    > cereal-makers, reducing cartridge prices by putting less ink inside, and
    > making the cost of ink overall appear cheaper.

The problem is that the cost of ink hasn't really dropped, so the prints
are still expensive. Not every consumer is stupid enough to miss that
fact.

    > Consumers are still trying to find a new digital routine. Ana Scofield,
    > a travel writer based in St. Paul, Minn., received a new H-P digital
    > camera from her fianc over the summer. She began snapping pictures of
    > her two teenage children immediately, and to her delight, was able to
    > print the photos out at home on the H-P printer that had come bundled
    > with the digital camera.
    >
    > But because of the costs and hassles of buying new printer cartridges,
    > she plans to split her printing between H-P and the retailers. "I'll
    > print pictures that I want right away at home," says Ms. Scofield. "But
    > for multiple copies, I'll definitely go to someone else."

Eventually, she'll be getting almost all her prints at a retail outlet.
It's easier, faster, and cheaper.

--
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Jeremy Henderson

On 2004-11-20 06:20:47 +0100, Mxsmanic <[email protected]> said:

    > poldy writes:
    >
    >> Like millions of other Americans, Julie Berry got a digital camera this
    >> year. What the 35-year-old stay-at-home mom does with the pictures is
    >> the subject of the next big battle over the future of photography.
    >>
    >> After snapping shots of her 2-year-old daughter, Ginger, Ms. Berry
    >> printed them out in her study -- and was disappointed. "The photos just
    >> didn't have great color or great resolution," she says. "I just
    >> thought: 'Oh well, I guess we have to buy a better printer.'*"
    >>
    >> A few weeks later, Ms. Berry had more luck at the digital printing
    >> kiosk at the CVS Corp. pharmacy near her home in Mansfield, Mass. On
    >> her first try, Ms. Berry produced 30 digital prints for 29 cents a pop
    >> in less than half an hour. Now, she's a convert. "It's easy and it's
    >> very reasonably priced," she says, "especially considering I don't want
    >> to spend time and money and run out to buy a new printer."
    >
    > Newbies in digital photography rapidly discover that the only way to get
    > nice prints is to take the digital photos to a lab. So-called digital
    > cameras only simplify the taking of pictures; they do not provide better
    > pictures, and they certainly do not make it possible to replace photo
    > labs for getting quality prints.

Whoa! Mixi in "Talking sense" Shock Horror!

In fact I am mystied by the idea of printing your photos at home - you
have to buy a printer, mess with inks, buy special paper in a variety
of sizes, experiment with setting up the parameters, and wait for the
thing to print out. Then you have a print that will probably fade
rapidly in sunlight.

The alternative is to upload your photos to a photo service and next
day pick up your gleaming prints from their store (I recommend Photo
Service in Frogland - which I tried out at Mixi's suggestion).
Infinitely better idea.

J;

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Mxsmanic

Jeremy Henderson writes:

    > In fact I am mystied by the idea of printing your photos at home - you
    > have to buy a printer, mess with inks, buy special paper in a variety
    > of sizes, experiment with setting up the parameters, and wait for the
    > thing to print out. Then you have a print that will probably fade
    > rapidly in sunlight.

I agree. That's why I think photo labs will become the preferred source
of prints in the future. Internet print services have a future,
too--they will be cheaper but slower than the photo labs.

Home printers will be useful only for those who are hellbent on printing
their own photos at any price, and for some artists who want to achieve
special effects.

Note that home printing of black and white can produce beautiful
results, but it still requires a dedicated printer, special inks,
special papers, etc. It's not identical to a chemical print, but it's
still very nice. Color, on the other hand, is always inferior to lab
prints.

    > The alternative is to upload your photos to a photo service and next
    > day pick up your gleaming prints from their store (I recommend Photo
    > Service in Frogland - which I tried out at Mixi's suggestion).

Have you used their Internet service, then? What do you think? I've
only used them in person.

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Jeremy Henderson

On 2004-11-20 11:29:12 +0100, Mxsmanic <[email protected]> said:

    > Jeremy Henderson writes:

    >> The alternative is to upload your photos to a photo service and next
    >> day pick up your gleaming prints from their store (I recommend Photo
    >> Service in Frogland - which I tried out at Mixi's suggestion).
    >
    > Have you used their Internet service, then? What do you think? I've
    > only used them in person.

I used the service whereby you select which shop your photos will be
printed at, upload the files via a client software, and then pick the
prints up yourself at that shop. I was happy with the quality, and it
worked perfectly for me, as the shop I chose is literally ten metres
from where I work.

I previously used Photoways, or Kodak (via iPhoto) but I was killed by
the postage charges, particularly in the case of the iPhoto store.

J;

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Chancellor Of The Duchy Of Besses O' Th' Barn

Mxsmanic <[email protected]> wrote:

[]
    > Newbies in digital photography rapidly discover that the only way to get
    > nice prints is to take the digital photos to a lab. So-called digital
    > cameras only simplify the taking of pictures; they do not provide better
    > pictures, and they certainly do not make it possible to replace photo
    > labs for getting quality prints.

Not just digital cameras. We still use a regular camera, so we have the
film developed. We use a mail order company which is very reasonable,
and we're always happy with the quality. However, if I try to scan a
photo, it usually looks fine on the computer screen, and is fine for
emailing, web, etc., but always looks disappointing when printed out,
even on larger paper. It's a shame, because especially for enlarged
images, it _would_ actually be cheaper for me to print them myself, as
you can buy good quality photographic paper quite cheaply here.

I've had a look at the results on different printers in shops,
especially ones that gear themselves specifically towards printing
direct from camera, and the quality doesn't seem much better.

I've tried tweaking different settings, touching up the images- just
doesn't look very good in comparison to the original print.

--
David Horne- www.davidhorne.net
usenet (at) davidhorne (dot) co (dot) uk

Mxsmanic

chancellor of the duchy of besses o' th' barn writes:

    > I've tried tweaking different settings, touching up the images- just
    > doesn't look very good in comparison to the original print.

Successful scanning and printing of film images requires quite a bit of
practice.

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Frank F. Matthews

Jeremy Henderson wrote:

    > On 2004-11-20 06:20:47 +0100, Mxsmanic <[email protected]> said:
    >
    >> poldy writes:
    >>> Like millions of other Americans, Julie Berry got a digital camera
    >>> this year. What the 35-year-old stay-at-home mom does with the
    >>> pictures is the subject of the next big battle over the future of
    >>> photography.
    >>> After snapping shots of her 2-year-old daughter, Ginger, Ms. Berry
    >>> printed them out in her study -- and was disappointed. "The photos
    >>> just didn't have great color or great resolution," she says. "I just
    >>> thought: 'Oh well, I guess we have to buy a better printer.' "
    >>> A few weeks later, Ms. Berry had more luck at the digital printing
    >>> kiosk at the CVS Corp. pharmacy near her home in Mansfield, Mass. On
    >>> her first try, Ms. Berry produced 30 digital prints for 29 cents a
    >>> pop in less than half an hour. Now, she's a convert. "It's easy and
    >>> it's very reasonably priced," she says, "especially considering I
    >>> don't want to spend time and money and run out to buy a new printer."
    >> Newbies in digital photography rapidly discover that the only way to get
    >> nice prints is to take the digital photos to a lab. So-called digital
    >> cameras only simplify the taking of pictures; they do not provide better
    >> pictures, and they certainly do not make it possible to replace photo
    >> labs for getting quality prints.
    >
    >
    > Whoa! Mixi in "Talking sense" Shock Horror!
    >
    > In fact I am mystied by the idea of printing your photos at home - you
    > have to buy a printer, mess with inks, buy special paper in a variety of
    > sizes, experiment with setting up the parameters, and wait for the thing
    > to print out. Then you have a print that will probably fade rapidly in
    > sunlight.
    >
    > The alternative is to upload your photos to a photo service and next day
    > pick up your gleaming prints from their store (I recommend Photo Service
    > in Frogland - which I tried out at Mixi's suggestion). Infinitely better
    > idea.
    >
    > J;
    >


There are several reasons for printing your photos at home. One is
that, after I've eliminated the obvious poor shots, I like to look at a
physical reproduction to pick the small number that deserve a high price
print. The screening does not need to be done with large glossy prints.

Wabcdef

Hello,
Just to give a few exemple of what we can do whith a digital camera
go on this site :
http://perso.wanadoo.fr/jjcm

jja

Mxsmanic

Frank F. Matthews writes:

    > There are several reasons for printing your photos at home. One is
    > that, after I've eliminated the obvious poor shots, I like to look at a
    > physical reproduction to pick the small number that deserve a high price
    > print.

The test print you make at home will cost more than the "high-priced
print." Additionally, it provides no indication at all of how the
high-priced print will look, since the printing processes are completely
different. You're better off picking what you want to print by viewing
photos on the screen.

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Miguel Cruz

chancellor of the duchy of besses o' th' barn <[email protected]> wrote:
    > I've had a look at the results on different printers in shops,
    > especially ones that gear themselves specifically towards printing
    > direct from camera, and the quality doesn't seem much better.

Many of the shops just have inkjet printers like you might have at home. For
really good results you have to use the online places that send you the
prints by post - the stuff they do is indistinguishable from film prints if
your image resolution is sufficient.

There are a few large shops that have this equipment, but it's expensive so
not every little corner pharmacy will bother.

miguel
--
Hit The Road! Photos from 32 countries on 5 continents: http://travel.u.nu

Chancellor Of The Duchy Of Besses O' Th' Barn

Miguel Cruz <[email protected]> wrote:

    > chancellor of the duchy of besses o' th' barn
<[email protected]> wrote:
    > > I've had a look at the results on different printers in shops,
    > > especially ones that gear themselves specifically towards printing
    > > direct from camera, and the quality doesn't seem much better.
    >
    > Many of the shops just have inkjet printers like you might have at home. For
    > really good results you have to use the online places that send you the
    > prints by post - the stuff they do is indistinguishable from film prints if
    > your image resolution is sufficient.

That's definitely what I've seen. It's just that the marketing often
makes it seem as though it's 'the same' as having professional prints.
Waste of money for many people, probably.

--
David Horne- www.davidhorne.net
usenet (at) davidhorne (dot) co (dot) uk

Go Fig

In article <[email protected]>, Miguel Cruz
<[email protected]> wrote:

    > chancellor of the duchy of besses o' th' barn
    > <[email protected]> wrote:
    > > I've had a look at the results on different printers in shops,
    > > especially ones that gear themselves specifically towards printing
    > > direct from camera, and the quality doesn't seem much better.
    >
    > Many of the shops just have inkjet printers like you might have at home. For
    > really good results you have to use the online places that send you the
    > prints by post - the stuff they do is indistinguishable from film prints if
    > your image resolution is sufficient.


I'm VERY satisfied with the service I get from Kodak via Mac's iPhoto
(the most elegant digital library I've seen). I always get it via the
mail in 2 days... cost about $3 on most shipments.

I wonder what the results will be with my new Sony that I will be
getting shortly, it that has: RAW (no compression), whatever that turns
out to be... I kinda think I'm still going to need to convert it to a
jpeg for processing...

jay
Sat Nov 20, 2004
mailto:[email protected]


    >
    > There are a few large shops that have this equipment, but it's expensive so
    > not every little corner pharmacy will bother.
    >
    > miguel

Jeremy Henderson

On 2004-11-20 22:17:58 +0100, Go Fig <[email protected]> said:

    > I'm VERY satisfied with the service I get from Kodak via Mac's iPhoto
    > (the most elegant digital library I've seen). I always get it via the
    > mail in 2 days... cost about $3 on most shipments.
    >
    > I wonder what the results will be with my new Sony that I will be
    > getting shortly, it that has: RAW (no compression), whatever that turns
    > out to be... I kinda think I'm still going to need to convert it to a
    > jpeg for processing...

You will indeed. Plus, iPhoto won't handle RAW files, so you'll need to
rethink your cataloguing strategy.

J;
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