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HP’s CEO Says He Wants To Make Printing A Subscription

Printers have been making people upset because they cost a lot, and companies like HP seem to be using tricky tactics in the ink market. HP got in trouble for stopping other companies’ ink and sending updates that made printers not work with those inks. HP’s CEO, Enrique Lores, explained the company’s side in an interview with CNBC at the World Economic Forum in Davos.

Lores emphasized the importance of protecting HP’s intellectual property (IP) in ink technology. According to him, when non-HP ink cartridges violate their IP, the company stops the printer from working to prevent potential issues, including security concerns. He suggested that third-party cartridges could introduce viruses to printers and networks. However, a detailed examination by Ars Technica found that while it is technically possible to embed malware in a printer cartridge, the actual risk to users and small businesses is minimal. HP’s 2022 bug bounty focused on a printer cartridge attack, but it only posed a limited risk to the printer itself.

The controversy arises from accusations that HP is creating a problem to provide a solution that involves blocking third-party ink suppliers, effectively forcing customers to buy overpriced first-party ink. This tactic has led to a federal class action lawsuit in the United States, alleging that HP unfairly compels customers to purchase its ink by locking down printers that were previously compatible with third-party cartridges through software updates.

Lores’ remarks about IP protection and the potential risks associated with third-party ink did not sit well with some, including the CNBC hosts. The CEO’s statements seemed to imply that HP’s IP and supply chain lock-in were more significant concerns than customer safety.

The conversation then shifted towards the idea of third-party ink cartridges. When asked about the value of a third-party market, Lores expressed HP’s view that they aim to make printing as easy as possible. He disclosed the company’s long-term objective of making printing a subscription service, highlighting the convenience and sustainability it offers. This aligns with HP’s existing Instant Ink program, which encourages users to subscribe to ink and toner cartridges.

Lores admitted that HP loses money on printer sales but makes up for it with high profit margins on ink and paper. He advocated for expanding the subscription model not only for printers but for other products as well, including PCs.

The interview revealed a fundamental conflict between HP and some customers, with Lores characterizing an HP printer owner who doesn’t buy HP ink as a “bad investment.” This perspective clashes with the notion of customers being seen as investments, especially after they have already paid for a printer.

The conflict has led to a class action lawsuit, accusing HP of deploying “security updates” to protect its business model rather than its users. As HP continues to push its subscription-based ink model, customers face a choice between the convenience it offers and concerns about being locked into an expensive and potentially monopolistic ink ecosystem.

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