Everyone is going back to the office after long absences, so why aren't they all buying new printers?
In part because of AI, HP CEO Enrique Lores told analysts in an earnings call on Wednesday.
Companies are spending on AI and PCs, said Lores, and "we think that this has impacted in the short term the sales of print hardware in the office side".
The good news for HP, which also sells AI PCs, is that everyone apparently wants AI PCs, and they're willing to pay a good 10% to 15% more than they would for standard boxes.
That, plus the Windows 11 refresh, is part of why personal systems sales were worth 2.5 times more than its printer business in the last quarter, HP said – in revenue terms. But when it comes to profit, the 29% of revenue printer side still made for 56% of HP's segmented pre-tax earnings, thanks to the kind of margins the computer business can only dream of.
Where are the printers?
Which is why analysts wanted to know what gives with the apparent mismatch between a drumbeat of RTO orders across business sectors and the lack of print hardware spending.
The highly profitable print business continues to decline in steady single-digit percentage terms for HP, but it is clinging to the profit through subscription models.
Measured in terms of pages printed, though, said Lores, demand for print is right where HP expects it, so spending on new printer hardware can only be deferred, not eliminated, "to make sure that employees are having the right experience".
HP's print business recorded a margin of 17.3% for the three months to end July, compared to 5.4% for personal systems. But it was in print that the company complained about unexpectedly competitive pricing, in both corporate and consumer, as its competitors failed to pass on the cost increases due to America's trade wars.
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