Compaq Takes Nice
Slice of Inkjet
Market-Comp. Retail
Wk.
September 28, 1998, Issue: 220
Section: News
PC-Printer Bundles, Mail-in Rebates Help Vendor Take on
HP, Epson -- Compaq Takes a Nice Slice of Inkjet Market
Steve Koenig
Houston - Compaq Computer is gaining ground in the
competitive inkjet printer
market by using mail-in rebates and PC-printer bundles to
drive sales, industry
analysts said.
"Compaq dramatically increased its unit market share in
August," said Stephen
Baker, senior hardware analyst for PC Data, Reston, Va. "It
appears that
Compaq's gains in the color inkjet market have come largely
at the expense of
Hewlett-Packard and Epson."
According to PC Data, Compaq's unit share in the color inkjet
market in June
and July was less than 1 percent, but increased to 6.8 percent
in August.
Compaq entered the printer market in May with the release of
three color
inkjets: the IJ-200, the IJ-700 and the IJ-900.
Industry observers pointed to Compaq's PC-printer bundles
and a $30 mail-in
printer rebate launched in August as likely factors in the
company's
market-share gains.
A Compaq official described the rebate program, which ends
Nov. 2, as "very
successful."
"We are pleased with our progress so far," said Kevin Kyle,
director of product
marketing. "Promoting [Compaq] printers with our PCs was a
key strategy
when we entered the retail printer market in May, but bundling
will not be [our]
only printer endeavor."
Compaq officials declined to discuss future marketing plans.
A buyer for a national consumer-electronics chain said
Compaq's PC-printer
bundles are selling well at his stores. "Compaq bundles are
almost a weekly
feature in our national advertising circular," the buyer said.
"The three-color
[IJ-200] is quite popular, but sales of its [IJ-700 and IJ-900] are
sluggish."
Compaq's IJ-200, which sells for $99 after rebate, accounted
for 83 percent of
Compaq's printer unit sales in August, PC Data reported.
PC Data's Baker said he isn't surprised the IJ-200 dominates
the vendor's
printer sales. "Compaq is now beginning to accomplish what
they set out to do,
which is spur sales of Compaq PC bundles," he said.
Compaq acknowledged the success of the IJ-200 is creating a
sales imbalance
in its printer line. "We recognize the need to promote our
higher-end SKUs
more effectively and plan to make some adjustments to our
strategy," Kyle said.
Phil Magney, president of ARS, Irving, Texas, said the trouble
with Compaq's
higher-end SKUs is that they don't offer any performance
advantage over
printers in the same price range. "Still, there is substantial
brand equity in the
Compaq name," he said.
Baker added: "The biggest plus for Compaq printers is the
tremendous leverage
they can generate from their PCs. Bundling will continue to
drive Compaq
printer sales in the fourth quarter."
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