2 Terrible Ideas From HP
Those words literally escaped my lips when I read what Hewlett-Packard (NYS: HPQ) is up to now. It's about six months too late to be an April Fool's joke, so unfortunately these ideas must be for real. Which one should we start with: dumb or dumber?
I'll start with dumb. HP announced an "Instant Ink" pilot program, which is a subscription service that promises savings and convenience for subscribers. Through the service, HP will automatically deliver "Original HP Ink cartridges" to your home or office as needed, with shipping bundled into the service. The cost will range from $5.99 to $10.99 per month, depending on the product line. The company claims that users may save up to 50% annually in exchange for "one low monthly fee."
Picking up an ink cartridge typically costs between $20 and $35. Instant Ink will cost you between $72 and $132 annually. You could buy three cartridges per year for the same cost. It sounds like a no-brainer to sign up if you're buying at least four cartridges per year. The problem is that anyone who's using an ink printer enough to buy that many almost-pure-profit cartridges should have picked up a laser printer long ago -- many of which cost less than $100.
Now it's dumber's turn. The second pilot program to be announced alongside Instant Ink is called On-Demand Content, with publisher Conde Nast as an accomplice. This service features a print-to-home service for publication subscribers to schedule the delivery of content directly to users' printers. This could have been a good idea -- if it was 1992. There are two main reasons it's destined to fail -- two little things I like to call "the Internet" and "email."
It's not as if Conde Nast is stuck in the stone age; the publisher is onboard with Apple (NAS: AAPL) to bring its publications to iOS 5's Newsstand app, which also promises convenient delivery sans tree genocide.
Subscribers of both services can look forward to killing dozens of trees and coming home to stacks of magazines awaiting you on your printer tray and an ink cartridge in your mailbox. TechCrunch's John Biggs provides this apt analogy: "This is kind of like the gas station down the street offering you cheaper gas and then hopping in your car at night to drive it around the beltway a few times to keep your tank low."
Hopefully, these ideas weren't spawned by freshly minted HP CEO Meg Whitman. If they were, her tenure won't match predecessor Leo Apotheker's one-year stint.
Remember to print this article for your records and safekeeping. And while you're waiting, add Hewlett-Packard to your Watchlist to watch these pilot programs fail miserably.
At the time this article was published Fool contributorEvan Niureminds you that printing this article is a terrible waste. Remember the Three R's: Reduce, Reuse, and Recycle! Evan owns shares of Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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