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August 29, 2005

HP Gets The Full Picture In Online Photo Service

Courtesy of InternetWeek

Hewlett-Packard Co. on Monday said consumers using its Snapfish online photo service can order prints and pick them up in an hour at their local Walgreens pharmacy, a move that reflects a trend among people of using retail printers more and home printing less.

HP, based in Palo Alto, Calif., is an example of a printer maker that is trying to cover all channels in photo printing, including retail outlets, home and online printing. The Walgreens announcement applied to stores in Boston, New York and San Francisco.

HP, however, plans to expand the number of participating Walgreens quickly. The company expects to have 4,000 Walgreens in the program by September, with additional outlets added over time. The announcement followed by about a month Walgreens's selection of Snapfish as the engine behind its own online photo service.

The number of digital photos printed each year has been growing steadily. In 2003, 2004 and 2005, the numbers were 7 billion, 13.5 billion and 18.3 billion, respectively, according to International Data Corp.

In the meantime, IDC has seen a trend toward higher use of retailers in printing. This year, IDC expects 65 percent of digital photos to be printed in the home, 25 percent at a store or kiosk and the rest via the Internet. By comparison, 90 percent were printed at home in 2002 and only 4 percent in stores. Last year, the numbers were 74 percent and 20 percent, respectively.

To make sure it profits no matter where consumers do their printing, HP is beefing up offerings in every channel. HP, as well as some analysts, expects all three printing options to remain strong markets, because each offers distinct advantages and prices are comparable.

"At the end of the day, we see all three as being substantial segments," Paul Schumer, vice president of marketing at Snapfish, said. HP's overall strategy is to meet consumers' needs "no matter where they want to go."

To use the Walgreens option, Snapfish customers choose the pick-up option, enter their zip codes and select a store from the provided list of locations.

HP on Monday also launched several features on Snapfish, including a print-at-home service for photos stored on the site. In addition, subscribers can send photos, along with a personalized message, from the web site to as many as 10 mobile phone numbers at a time.

In general, printer makers, retailers and online photo services have reduced prices in order to remain competitive in a market where consumers frequently seek the lowest price.

To balance the price-cutting, online photo sites are increasing the number of additional services, such as being able to place photos on mugs and t-shirts. Snapfish has expanded the latter service to cover as many items as possible.

"If you can put a photo on it, you can find it on Snapfish," Schumer said.

The service has also introduced poster-size printing for people looking for a large print to hang on the wall.

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