Hewlett-Packard Corporation (HPQ) has declared that it has reached a settlement with Hong Kong-based Print-Rite Holdings Ltd.
In accordance with the terms of the settlement, Print-Rite will accept HP’s patent related to HP 02 inkjet cartridges. To give effect to this decision, Print-Rite has issued an order for the removal of all those Print-Rite products products that were involved in the dispute from the United States and other countries having corresponding patent filings.
The settlement of this dispute will bring in some additional revenue, helping Hewlett-Packard revamp its printing unit. In its initial effort, the company developed a number of products that were showcased as part of its latest Graphics Solutions Business portfolio in the PRINT 09 tradeshow. The company claims, this segment addresses the $115 billion potential global market opportunity for digital color printing. So there is significant growth potential in the area.
This apart, Hewlett-Packard has also entered into a strategic agreement with Toshiba (TOSBF.PK). As per the agreement, Toshiba will be able to sell HP’s laser jet product line to customers. The agreement expands and strengthens Toshiba’s overall product offering while also expanding HP’s reach into more products and customers. This partnership will prove beneficial to both dealers and customers, as dealers will be able to avail of discounts, which will be transferred to end customers. So Hewlett-Packard is trying to create a win-win situation for all the parties involved in its printing business.
Hewlett-Packard’s first quarter 2010 EPS exceeded the Zacks Consensus Estimate and revenue moved up significantly compared to the year-ago quarter. The company expects revenue to decline slightly in the second quarter, but is upbeat about 2010 revenue.
Although we remain positive on the company’s performance going forward, given that demand is stabilizing and cyclical businesses (particularly consumer PC) are rebounding, we expect a gradual to slow revival in the printing business in the long run.
Disclosure: No positions
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