I may have to eat a little crow.

On June 12, Funai issued a press release announcing the launch of its first Kodak-branded inkjet device, the Kodak Verité 55. The news itself was not a surprise because Funai announced in February that it would license the Kodak brand and use it on consumer and small office/home office (SOHO) printers and consumables worldwide (see “Funai Announces License Agreement with Kodak to Sell Kodak-Brand Hardware and Consumables”).

I have not been shy about saying that the consumer/SOHO inkjet business simply doesn’t need another player and that Funai should not expect that it can marry one failed inkjet experiment (Lexmark’s inkjet assets, which Funai bought) to another (Kodak’s name in the consumer inkjet business) and expect a more successful outcome (see “The Inkjet Business Needs Another Player Like a Fish Needs a Bicycle”). But now Funai has gone and launched a product that is already on store shelves at Walmart, and it is different than the product I expected—the Kodak Verité 55 uses a different platform and different supplies and is priced differently than what I imagined. It also offers some compelling cost-per-page (CPP) figures that may appeal to the Walmart customer and enable Funai to win over some customers from rival OEMs. So score one and congratulations for Funai! Score zero and a plate of crow for yours truly.

Still, for many reasons discussed below, I believe Funai will face some big challenges in its attempt to crack the inkjet market, and its prospects for success are not at all a sure thing.

[Editorial note: This article was updated on June 30, 2015, to reflect some additional details uncovered after the original June 17 publication date. Paragraphs that have new/additional information include a note in brackets indicating that the paragraph has been updated.]

The Kodak Verité 55

Let’s dive right in and take a look at the Kodak Verité 55. When Funai announced that it would soon launch consumer/SOHO inkjet products under the Kodak brand, my best guess was that Funai would leverage what had been Lexmark’s latest and greatest inkjet platform, the Vizix Pro platform, which had been used in devices such as the Lexmark OfficeEdge Pro4000, Pro4000c, Pro5500, and Pro5500t. I thought that Funai would have to bring the prices of such devices down from the $249 to $499 that Lexmark charged for the OfficeEdge machines to below $200 and possibly below $150, given the evolution of rival SOHO inkjets since the introduction of the OfficeEdge inkjets. I still think Funai might use the Vizix Pro/OfficeEdge platform but at lower price points if it later launches more business-oriented inkjets for the SOHO environment.

But the Kodak Verité 55 is something different—an entry-level ($79.47) inkjet all-in-one aimed at consumers. Funai’s press release states that the machine is available currently at Walmart, and indeed we were able to find the device on Walmart shelves (see photo at right). As far as I can tell, the Kodak Verité 55 is not currently available via other channels, and as of the time of writing I was not able to find supplies for the device either in-store or online at Walmart.

Specifications for the Kodak Verité 55 are shown at right. It is a three-function inkjet all-in-one with ISO print speeds of 10.0 ppm in black and 4.2 ppm in color, a 1,000-page maximum monthly duty cycle (recommended monthly volume is 300 pages), a maximum print resolution of 4,800 × 1,200 dpi, a 60-sheet input tray, and USB. 2.0 and WiFi connectivity (plus Wireless Direct). It comes with mobile printing capabilities, including support for Apple AirPrint and Google Cloud Print. It also supports what is called the Kodak Verité Printer App, which is available for Android and Apple mobile operating systems and enables scanning or printing from a smartphone or tablet. This is a fairly unremarkable set of features and is similar to the specifications of other similarly priced inkjet all-in-ones.

The Kodak Verité 55 uses thermal print heads and a four-color ink set featuring a pigmented black ink and dye-based color ink. Funai did not release any details, such as nozzle count or drop size, for the print heads. Also, it was not made explicit in any of Funai’s marketing materials whether the Kodak Verité 55 uses integrated inkjet cartridges with the print head built in or permanent/semipermanent print heads and separate ink tanks. Lexmark had both types of designs at its disposal, so either is possible. 

Initially, I believed that the Kodak Verité 55 employed permanent print heads and ink tanks due to the very low price of the consumables for this device. Very low prices on inkjet cartridges are typically not possible with integrated inkjet cartridges due to the cost associated with print heads. If the Kodak Verité 55 employed separate print heads and ink tanks, I believed it was probably based on the original Vizix platform, as that platform could accommodate either four individual color tanks or black and tricolor tanks because Lexmark’s inkjet engine customer, Dell, demanded the latter, and the Kodak Verité 55 employs one black cartridge and one tricolor one. [Editorial note: This paragraph has been updated.]

However, somewhat surprisingly, the Kodak Verité 55 employs integrated print head black and tricolor inkjet cartridges. Lexmark rolled out many such devices over the years, although it stopped introducing new inkjets based on integrated inkjet cartridges after introducing the Vizix platform in 2009. I could not find an exact match to the Kodak Verité 55 in Lexmark’s inkjet lineup circa 2008, but the print heads used in Lexmark’s inkjet devices based on integrated cartridges of that era produced the same 4,800 × 1,200 dpi color print resolution as the Kodak Verité 55. While most of the integrated cartridges used in Lexmark’s inkjets had lower yields than the XL and XXL cartridges employed in the Kodak Verité 55, that is not universally true. For example devices such as the X3650, X4650, X5650, and X6650, could use standard-yield cartridges with yields of 175 pages in black and 150 pages in color and high-yield cartridges rated at 500 pages each for black and color [Editorial note: This paragraph is new.]

The enormous table at the very end of this article shows more than you probably want to know about how Funai’s Kodak Verité 55 stacks up with rival inkjet all-in-ones priced under $100 in the United States. The average print speed for this class of device is 9.7 ppm in black and 6.1 ppm in color, so, if anything, the Kodak Verité 55 is a tad slower than average when printing color pages. Otherwise, specs are right in line with other products at this price point.

Where Funai is looking to differentiate the Kodak Verité 55 is not in terms of hardware specifications or acquisition price, but in much the same way that Kodak sought to differentiate its line of consumer/SOHO inkjets—by promoting low ink costs.

Kodak #5 Inkjet Cartridges

Funai’s press release puts the low-cost ink message front and center. It states, “The new printer provides an easy way for people to save up to 50% on their printing costs. Consumers get the satisfaction of knowing they can save on ink but also the convenience of having extra large (XL) color and black cartridges—that double the print yield—from the ink included in the box. The XL cartridges will print 360 color pages and 400 black pages. This is equivalent to $50 of value if printed using other leading manufacturer’s ink cartridges.”

The Kodak Verité 55 use three different sets of black and tricolor inkjet cartridges, as shown below. The standard-yield #5 black and tricolor SKUs yield 200 and 180 pages, respectively, and are priced at $9.97 and $17.97 apiece for a cost per page (CPP) of 4.99 cents in black and 14.97 cents for a four-color page. (Note that Funai quotes CPP for each cartridge whereas Actionable Intelligence’s color CPP figures are based on a four-color page and thus include the cost of both the black and the color cartridges.)

However, the Kodak Verité 55 ships with the high-yield cartridge: the #5 XL black and #5 XL tricolor cartridge that have yields of 400 pages and 360 pages, respectively (double the yield of the standard-yield cartridges, as Funai notes). Unfortunately, Funai did not provide MSRPs for these cartridges, but based on its estimates of per-cartridge CPP figures of 3.7 cents and 6.1 cents, respectively, I estimate that the #5 XL black cartridge will sell for about $14.78, while the #5 XL tricolor cartridge will sell for $21.97. This puts the cost of a black and four-color page at 3.70 cents and 9.80 cents, respectively.

Funai is also offering an extra-high-yield set of cartridge, the #5 XXL black and #5 XXL tricolor cartridge, with respective yields of 600 and 500 pages. Based on Funai’s per-cartridge CPP figures of 3.3 cents and 5.4 cents, it seems these cartridges will sell for around $19.78 and $26.97, respectively. This puts our CPP estimates using this set of cartridges at 3.30 cents for a black page and 8.69 cents for a four-color page.

The CPP figures for the Kodak Verité 55 with the extra-high-yield cartridges installed are excellent. As the chart below shows, the Kodak Verité 55’s black and color pages of 3.30 cents in black and 8.69 cents are the lowest in its class of sub-$100 inkjet all-in-ones, handily beating the devices with the next-lowest CPP figures, various Brother machines with pages costs of 4.16 cents in black and 11.66 cents in color. Actionable Intelligence calculates the average CPP of the other devices in this class at 5.89 cents in black and 14.86 cents in color. So while the Kodak Verité 55 doesn’t save consumers quite 50 percent on their printing costs compared to the class average, the savings on a CPP basis are indeed significant.

How Will This Play Long Term?

I admit I may have been a bit harsh in my assessment of Funai’s play for a share of the consumer/SOHO inkjet market, and I was wrong about what the first Funai Kodak inkjet might look like (although as discussed above I think Funai’s higher-end inkjets may indeed resemble the Lexmark OfficeEdge devices). Moreover, I suspect that a low-priced inkjet that also offers low CPP figures may do well at Walmart, given that low prices are important to the typical Walmart shopper.

All that said, while I am willing to eat crow, I am only eating a little crow. First, crow is unappetizing and second I still have reservations about Funai’s Kodak-branded inkjets proving successful long term.

First of all, shelf space is limited at retail for inkjet printers and all-in-ones these days. While Funai has shelf space at Walmart, everyone already knew Funai would get shelf space at Walmart. That was a given. If Funai is to grab a more than minuscule slice of the consumer/SOHO inkjet market, it will need broader distribution for its inkjets. Presumably the firm has plans to expand distribution, but other smaller inkjet OEMs over the years have found the distribution piece of the puzzle challenging given the status of entrenched players like Brother, Canon, Epson, and HP. It will be interesting to see what Funai’s strategy will be for the online marketplace, where its low-cost messaging may play well. Still, Funai needs broader distribution for its inkjets, and we haven’t seen that yet.

Another potential problem is that Funai appears to be simply replicating Kodak’s low-cost ink strategy but for even lower-priced hardware. This could be successful but it is potentially dangerous for Funai. All of us already know how that low-cost ink strategy worked out for Kodak (see and “Kodak Files for Bankruptcy” and“Kodak Will Exit SOHO Inkjet Hardware Market but Keep Selling Ink”). Kodak sought to upset the razor-and-blades model by charging more for its inkjet hardware and less for its ink, but in the end Kodak found it hard to make a profit and had to drop prices on its hardware and raise prices for its ink before exiting the market altogether. Funai is trying something more challenging still—charging little for both hardware and ink, so it will have to watch its margins very carefully. Presumably Funai has done its math and believes its pricing strategy for hardware and supplies will work.

But the firm may have had little choice other than to set its margins on the Kodak Verité 55 razor thin. Funai had to do something dramatic to differentiate its products in an already crowded market, and replicating Kodak’s low-priced ink strategy but for lower-cost devices appears to be it. That Funai believes it can make a profit with both low-priced hardware and low-priced supplies may be a reflection of the firm paying relatively little for Lexmark’s inkjet technology (see “Inkjet Technology on the Cheap: Lexmark’s Deal with Funai”), being able to do all the inkjet hardware and consumables manufacturing itself, and possibly paying relatively little for the rights to use the Kodak brand as well.

Also we have to point out that lots of experienced printer OEMs have tried to crack the consumer/SOHO inkjet market and failed. In addition to the examples of Kodak and Lexmark (see “Lexmark Inkjets: Requiescat in Pace, Part I and Part II”), Xerox and Samsung made brief forays into this market segment and have been burned. Xerox partnered with Sharp and Fuji Xerox on a line of SOHO-oriented inkjets starting in 2000 (although Xerox launched a small number of inkjet devices starting around 1998 or so), but Xerox pulled the plug on its SOHO inkjets in 2001. More recently in 2013, Samsung began offering Samsung-branded inkjets based on Kodak technology in Germany. (see “Kodak-Samsung Form Alliance, Samsung Launches Inkjet Units in Germany”). Ultimately, Samsung had to pay Kodak $38 million to sever the agreement after Kodak filed for bankruptcy and exited the consumer inkjet hardware business (see “Samsung Will Pay Kodak Millions to End Inkjet Supplier Relationship”). And of course there’s the example of Memjet, which failed to get major inkjet OEMs to adopt its office color platform, and instead is now selling its office color machine via MPS providers, a strategy that did not win it the SOHO/business inkjet market share that many once anticipated for the firm.

Despite this litany of challenges and past failures, it should be pointed out that the Kodak-like low-cost ink message on which Funai is banking its success did win Kodak some adherents. It also raised the hackles of other printer OEMs, some of which sought to reduce their own ink costs after Kodak’s market entry to undercut Kodak’s value proposition. It will be interesting to see if Funai’s market entry sparks competitors to reduce CPP figures in the consumer inkjet market segment where it has traditionally been sky high.

I look forward to following Funai’s consumer/SOHO inkjet endeavors in the months ahead.