Hewlett Packard's 8250 inkjet printer, targeted at consumers who will want to print pictures at home, costs $199 in stores, but it probably costs $199.80 to make, says Doug Moore, an analyst at research firm Current Analysis. The manufacturing cost estimate might be ten percent high at best, but either way, that doesn't leave a lot of wiggle room.
"It's the (business) model for the low-end inkjet market. The manufacturers reap whatever they are losing on the printers on the supplies," he said.
HP is trying to recover lost ground in the inkjet market to companies like Epson as well as encourage people to actually print at home. Commercial sites such as Wal-Mart have dropped their prices so much that it's now often cheaper to buy prints from commercial services than to print at home, said Amber Shore, another Current Analysis analyst. However, the lower price points HP is touting could draw in consumers. The home printer also gives one the immediate gratification, she added.