Is this the end for Cheap Printers June 17, 2006 11:48 by John Sollars

Most of us have bought a cheap inkjet printer and then been horrified at the cost of ink for it. In the meantime the manufacturers have lost money on the hardware, but made it hand over fist on their consumables. HP for instance makes half of its total corporate profit from Consumables. When you think of the size of HP corporate which incorporates Compaq Computers, Printers, Servers and tons of other hardward and half of their total profit is from consumables.

However following recent announcements by epson Seiko Corporation in Japan of Profits warnings and up to 3,000 redundancies will this sound the death knell for cheap inkjet printers?. The job losses are mostly part-time and contract posts over the next three years as part of its business plan for the medium term. Falling profitability as a result of lower prices for printers and liquid crystals are said to be impacting on the company. which is aiming to cut back on fixed costs and increase business efficiency.

In Europe, around 100 full-time posts from Seiko Epson's information technology equipment business are also to be cut while in Japan, it will trim back the scale of its office in Nagano Prefecture that produces small liquid crystals and transfer the business to Hokkaido. Seiko Epson expects that as a result of its plans, the pre-tax profit will rise to over 100 billion Yen in the year to March 2009 from a projected 26 billion yen in the financial year ending on March 31 2006. Seiko Epson has fallen on hard times amid tough price competition in the printer, semiconductor and LCD markets and part of its restructruing plan is to focus more onto the Multifuntion market where prices are not so cut throat and de-emphasise the low end cheap printer segment which it dominates at the moment. Could it be we are witnessing the demise of the £30 - £40 entry level printers?