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December 4, 2006 2:00 am
Hewlett-Packard will today unveil its latest push to capitalise on the digital transformation that is gripping the printing industry with a deal to provide industrial-speed colour printers for Amazon's books-on-demand service.
The deal is a sign of the opportunity HP sees for its digital printing technologies to disrupt the industrial printing market, most of which still runs on analogue printing presses. Terms were not disclosed.
Vyomesh Joshi, the head of HP's $27bn printing business, said the Amazon deal marked the latest progress in HP's bid to transform "from a printer company into a printing company".
HP hopes its high-speed Indigo digital printers, together with the software to manage them, will find a niche as Amazon and other retailers and publishers seek to manage their inventories better and tap into unmet demand for out-of-print titles.
"With an internet as an enabler, we believe there is tremendous demand for customers to get to that long-tail content," said Mr Joshi.
Greg Greeley, vice-president of Amazon's books business, said the deal would "significantly increase the number of available titles our customers can purchase".
The move comes amid a broader shift towards digital technologies.
Riley McNulty, an analyst at IDC, said digital printing is likely to gain share over the next several years as price pressures force printers to find new ways to expand their business.
"The [analogue] business isn't necessarily going away, but it's very difficult to grow it," he said.
Mr McNulty said digital technologies could improve the economics of the printing business by shortening turnaround times and by making it more economical to print in smaller batches. Digitisation also allows for customisation of individual copies of pages within a single print run - a feature that holds tremendous appeal for the multibillion-dollar direct mail business.
HP has said it expects the addressable market for digital printing to grow from about $1bn today to $10bn by 2010.
It faces competition from companies like Xerox and IBM, which are also encouraging customers to buy digital presses to augment their existing equipment.
Today's announcement marks the latest in a series of new deals by HP's imaging and printing group.
Earlier this year, it launched a line of new photo printing kiosks for use in retail stores.
Mr Joshi's group also launched Halo, a high-end video conferencing system designed for use by big companies.
Shares of HP closed fractionally lower on Friday at $39.44.
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