Dell green-lights photo printers

The Round Rock, Texas, PC maker plans to unveil a portable photo printer for consumers this fall and update its line of all-in-one printers with greater photo printing capabilities. The company is also eyeing a Dell-brand digital camera line, which could be produced through its partnerships with Kodak or Canon. Cameras, however, would appear much farther down the road, said Tim Peters, vice president and general manager for Dell imaging and printing, in an interview with CNET News.com.

Dell, which entered the printer business in March 2003 with Lexmark as its manufacturing partner, has been working to build a base of customers by entering the hottest market segments first--areas such as all-in-one inkjets and networked laser printers. It's tackling this by offering competitive prices and a simplified, good-better-best approach to configuring its printer models, which makes it simpler for customers to choose the right model for their needs, Peters said.

Dell's portable printer, designed to turn out 4 inch by 6 inch prints, will also be competitive on price with products from rivals--HP's latest 4-by-6 printer, the Photosmart 325, starts at $149--and will offer the ability to quickly print digital pictures from a wide range of cameras, Peters indicated.

"The opportunity (for a portable printer) was, 'What about the people who have a digital camera and want to take snapshots?and just want to print them on the go or have it on the kitchen counter all the time?'" he said. "We looked at what customers were looking for there. They were always looking for the value--the price advantage and cost per page--so clearly we will be there. But the other (aspect of the product) is convenience."

Those conveniences include supporting multiple memory card formats, as well as offering an easy-to-use interface for editing photos and speedy printing, Peters said.

"All three of those contribute to a convenience aspect that we think will be advantaged in this category versus what you see in the market today," he said. He declined to offer exact details on the product.

Not all customers desire portable photo printers. Thus Dell is also planning to update its all-in-one inkjet line with greater photo capabilities. It will offer a new midrange all-in-one, likely to be called the 942, with a built-in LCD screen for viewing and editing photos before they are printed, Peters indicated. A new high-end printer, likely to be called the 962, will offer more features over and above the 942. The 922, currently Dell's midrange all-in-one, will become its new entry-level printer in the category. Although the printers feature new capabilities, Dell will continue to sell them for about the same prices, which are roughly $100, $150 and less than $200.

"We're bringing more features and keeping those price points the same or actually bringing them down a little bit," Peters said.

While Peters admits that taking the good-better-best approach is "not rocket science," he said he believes customers value this simpler approach. To date, Dell has sold more than 2 million Dell-brand printers, netting it results such as 11 percent market share of all inkjet printer shipments during the second quarter of 2004, according to IDC figures.

Indeed, Brooks Gray, analyst with Technology Business Research, who also met with Peters this week, said Dell is executing well on its strategy so far.

"It's gaining market share across a number of segments as well as ramping up volume with its goal of 5 million unit shipments for the year," Gray said. Thus, "I expect that it will be able to exceed its $1 billion revenue projection" for printers.

Having already launched nearly 20 printer models in about 19 months and expanded geographically to about 60 countries, Dell expects to finish the year having sold about 5 million printers with printer revenue of about $1 billion, Peters said.

But Dell won't stop there. The company will continue to roll out new printers in 2005 and 2006 and has been evaluating entering the digital camera market and providing more services that would allow customers to share their digital pictures online or have them printed by a professional.

"We look at cameras all the time. We have strategic partnerships with Kodak, and we have a strong partnership with Canon," Peters said. "Cameras are an opportunity we continue to examine, but so far, this year you won't see cameras with a Dell brand on them. But we continue to evaluate that. We work with Kodak very closely to understand what the opportunity is."

Dell already has a partnership with Shutterfly, which hosts photos online and offers inexpensive prints, but it's also evaluating adding additional photography services.

"It's immaterial to Dell whether you want to print at home, print online or print with a portable photo printer, just don't print using an HP device, or don't print--share; that's fine with us too," he said. "That's a key strategic opportunity, and if we can give customers alternative choices that are more economical or more convenient, then that's how we think we can use it."