HP Tears Into Copier Market With Game Changing A3 Portfolio, Lowers Color Cost By 40 Percent

HP Inc. is set to tear apart the copier market with a new A3 printer portfolio that promises 40 percent lower costs for color and a market-shattering lower cost of service.

The 16-product-strong A3 lineup, which includes both HP PageWide and LaserJet offerings, will be formally launched by HP Inc. CEO Dion Weisler Monday at the company's Global Partner Conference in Boston.

HP's launch of its new A3 portfolio comes a few hours after the company disclosed plans to acquire Samsung Electronics' printer business for $1.05 billion early Monday morning.

Partners said the new products, which are priced from $3,000 to $20,000 and slated to ship next spring, spell trouble ahead for copier stalwarts like Xerox, Ricoh and Konica Minolta.

[Related: CRN's Coverage Of The HP Global Partner Conference]

"We have the pricing, flexibility – everything we need to disrupt this market," said Weisler in an exclusive interview with CRN. "That is the key point. We are disrupting. We are doing this with breakthrough technology – not traditional copier technology."

The A3 lineup, which includes innovative smart device service functionality aimed at making real-time adjustments to prevent failures, provides a new arsenal for partners driving recurring revenue with a copier replacement portfolio.

"If you know anything about the copier business it is that money is made and lost based on the cost of service," said Weisler. "With A3 we are dramatically reducing the parts and service costs, and that will translate into either increased margin for our partners or they can pass those savings on to the end customer in terms of cost per page."

Partners said they see the new A3 lineup, which includes proven HP security functionality aimed at stopping the ever-increasing security breaches that are taking place on printer networks, as the next battle ground in HP's bid to transform the printer landscape.

Joe Hemani, the founder and owner of Westcoast, a United Kingdom value-added distributor, said he expects the A3 lineup to drive a robust 18 percent to 22 percent increase in sales in that market segment for Westcoast in 2017.

"This is going to be very important for recurring revenue where you don't sell and forget, you sell and service, keeping customers happy," he said. "That is part of the new model of how we are going to take this product to the marketplace. Innovation and quality guaranteed. Price-affordable. That is the A3. It's a big game-changer for HP. HP's competitors better be careful."

Westcoast is investing in additional technical support reps who will be able to talk about the technology benefits of A3 and industry specific salespeople. That means hiring financial services experts to sell into financial institutions and legal specialists to sell to law firms. "We go into these accounts with our salespeople with partners," said Hemani. "We are doing the digging and heavy lifting. You don't dig, you don't earn."

Ken Lamneck, CEO of Insight Enterprises, the national $5.4 billion solution provider behemoth that sits on HP Inc.'s partner advisory board, said Insight is looking forward to the A3 opportunity. "We're excited that HP is addressing that A3 market," he said. "We have got to figure out how do we really play as a traditional printing partner. The question is how do we make sure we can make that transition? You have to have the right technical support and the right sales organization that can really address it. We are looking forward to getting more and more information to see exactly what our investment strategy needs to be for us to be successful there."

The A3 family is being delivered to the market in "record time" thanks to the entrepreneurial drive of the new HP, said HP Imaging and Printing Solutions President Enrique Lores, a 27-year HP veteran who led the team that successfully completed the historic HP split without missing a beat. The A3 family would have taken the old Hewlett-Packard at least twice as long to develop and bring to market, said Lores.

"We have never done anything this fast before," he said. "That is because of the ability we now have as an independent company to design, execute and move. With everything around this product family it would have been impossible to bring this to market before."

The A3 innovation goes beyond the products. The sales offensive includes a new smartphone portal specially designed for A3 partners to instantly search for product information, transactions or compensation.

The A3 launch is a testament to the speed, agility and focus of the new HP, said Lores. "This shows how much investment and passion the new company has for printing," he said. "We are showing how HP can bring a lot of innovation again to the market with new technology and tools to do business with our partners. We are a partner company. Everything we do is with the objective of making our partners more successful."