Not long ago, Hewlett-Packard
Offering digital-camera buffs a chance to upload images and pick them up at their local drugstore -- within an hour -- is an idea so simple that it's a wonder no one thought of it before. In fact, Eastman-Kodak
So why not take a Snapfish for a swim? Because there's already one shark in the space: a little company called Wal-Mart
Knowing that Wal-Mart is swimming these waters should lead shareholders to wonder: Is this move a moneymaker or simply a way to try to grab market share? With per-print prices of $0.10 to $0.12, Snapfish isn't offering anything Wal-Mart hasn't already covered. And worse yet, the Snapfish service has the potential to cannibalize HP's printer and consumables sales.
Just try the math. Up front, consumers save the $200 or more on the photo printer. Next up, they save on paper and ink. Consumables for HP photo printers run prices up to between $0.25 and $0.40 per print, depending on how cheap you can purchase the goods.
Since imaging equipment and consumables are among the most vital pieces of HP's growth strategy, stockholders might wonder whether deals like this aren't making it just a bit too easy for digital shutterbugs to avoid HP's printing products altogether. It makes little sense to me, especially since HP has already seen margin erosion in its imaging biz because of tough competition from the likes of Canon
For related Foolishness:
- See why Kodak is fading fast.
- Is HP a good turnaround play?
Motley Fool Stock Advisor
(NASDAQ:AMZN)has its own fish in this pond.
Seth Jayson still remembers when a good print meant a cool, creamy stop bath. At the time of publication, he had positions in no company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.