My experience with manufacturing giant, Hewlett Packard, is a good illustration of the Republican philosophy of business and its inherent problems.
I've been buying HP products for many years. I bought a Athlon system in 1999, a Pentium 4 system in 2001, and an HP laptop in 2004. And, it wasn't just computers. I bought an HP Deskjet 950c printer and an HP Officejet K80xi printer/scanner/fax along with an HP Scanjet 6300c flatbed scanner. I didn't have any complaint with the computers. I liked the quality of the print and I was happy with the scanner. They were also successful in getting me to switch brands. I began with two Packard Bell computers, two Canon printers, and my first laptop was a Gateway. Hewlett Packard is also not a small company. It's near the top of the Fortune 500 and did $112 billion in business in 2013. I'm doing business with a large, profitable corporation that made $5 billion in profit in 2013 but paid almost nothing in US taxes. This is pretty close to the Republican ideal. So, what could be the problem?
I'm happy with my Scanjet scanner and it still works perfectly, but I'm not using it because HP hasn't bothered to make an updated driver for Windows Vista/7/8. I am perfectly willing to pay a small fee, like $5, for a new driver but HP apparently doesn't feel like supporting their own products. I would have to buy a new scanner and, if I do that, then I have no reason to be loyal to HP. The scanner is annoying but it isn't the real problem. That would be the printers. Way back before I ever owned anything capable of running MSDOS, I liked to print. I ran through an entire box of 2,500 sheets of fanfold, tractor-feed paper. This was done first with a simple Commodore printer and, later, a much more robust NEC 5200. Of course, printers then switched to single-sheet typewriter paper without the holes and folds. And, I've gone through thousand of sheets of paper since then.
So, it is clear that I was used to printing and I printed a lot (and this should be great for a printer company like HP). However, that is no longer the case. Today, I am completely disgusted with the price of HP ink and I almost never print. To understand the cost of ink we need to have something to compare it with. I'm not going to do something silly and compare it with Coke or Pepsi because the volume isn't comparable. It makes sense that a mass produced soft drink would be cheaper. So, I'll use Bailey's Irish Cream for comparison. I'm sure they take quite a bit of care with this liqueur to make sure that it tastes the way it should and that it is safe to consume. I'm also pretty certain that most people would assume that more care would be taken by Bailey's with their product than HP would take with their printer ink. So, let's run through this.
Pepsi - $2.84/gallon
Baileys - $111/gallon
Based on this, I would guess printer ink would be perhaps $50/gallon. The actual price for HP ink is $1,350/gallon for black. I would never have imagined that I could print with Baileys for 8% of the cost of HP ink. With this stunning fact, I am now in desperate need of perspective. What exactly is printer ink? Well, when ink jet printers were first made, the ink was basically the same as food coloring. Today, you can buy cheap food coloring for about $6/gallon. I'm sure someone at HP would sputter and angrily insist with pursed lips and crossed arms that their ink was quite superior to a cheap food coloring. And, I would agree. So, let's bump this up. Bakers use a food-grade, water based coloring to decorate cakes. This is applied with an air brush so the pigment can't be too transparent but it also can't be so thick that it clogs the nozzle. This requires a better formula so this air brush food coloring costs $40 - 60/gallon. Interestingly, that's pretty close to my first estimate based on nothing but a comparison with Pepsi and Baileys. If this were the price for HP ink then I could get 42 ml for 67 cents instead of $15.
However, I can't get ink for that price for my printer because HP made the decision to have an astronomical markup for their ink and then to put special chips on the cartridges to prevent me from using a different ink in my own printer. To say that this is arm-twisting is an understatement. I don't have to buy manufacturer's tires, wiper blades, air filters, oil, transmission fluid, anti-freeze, or gasoline for my car. Who would buy a car that had these restrictions? I think that ink should be more competitive and closer to the cost of air brush coloring. But, maybe I'm wrong. Maybe no one else minds paying that much for ink. Maybe HP's plan is working as it should. I need another comparison.
What I think I should look at is 3D printing. Back in March of this year, HP announced that they would start selling a 3D printer at the end of their fiscal year which is October. I've seen a lot of speculation on this but, for the most part, this announcement is less than most people would guess. Why? The first working 3D printer was in 1984 and over the past thirty years, this technology has steadily improved. It mainly differs from regular printing because a vertical dimension is added to the two on a sheet of paper. Mostly, the printing function depends on precise stepper motors which is the same thing that is used on regular printers and scanners. HP has decades of experience with these. Some people have also done crowd funding in the neighborhood of $200,000 to create home 3D printers. Considering that HP has $13 billion in cash on hand, they could easily out develop, out produce, and out advertize any of these little start-ups. This should be a market that HP could take by storm and dominate.
However, HP will not be making a home 3D printer but instead a larger, more expensive enterprise model. To understand why, you need to understand the difference in technology. I could today build an ink jet printer except for the print-head. That is too precise for me to fabricate in my garage and the printer won't work without one. This fact, enabled HP to add proprietary chips and essentially hold the print-head hostage. This allowed them to successfully lock down their printers and keep other companies from producing compatible ink. However, there is no equivalent piece on a 3D printer. The hot end where the plastic filament is melted and deposited is readily available because it isn't high-tech. The feed device for the plastic filament is basically the same mechanism that is used on MIG wire welders. These are equally common. So, HP is frustrated because nothing on the machine is high-tech enough to make it proprietary. This fact is never more clear than when you see that there are open source plans for 3D printers. There is even an open source design for a 3D printer that makes parts out of metal.
I understand that among the Ayn Rand faithful there really is nothing wrong with holding your customers at gunpoint and grabbing whatever you can. It's just business, right? And, there is no doubt that this ongoing behavior by HP is making them money. However, it has also caused me to lose respect for a manufacturer that I've bought many products from in the past. I no longer see them as a company I would buy from in the future. And, when a company like HP finds itself avoiding a huge potential market like home 3D printing because it is scared to death of genuine competition, you really have to ask yourself if the Republican version of capitalism is something you should base an economy on.