Hewlett-Packard says Dell Computer's printer strategy has a fatal flaw--consumers prefer to purchase ink refills at traditional retailers rather than by mail. Vyomesh Joshi, president of HP's imaging and printing systems group, said Friday during a Merrill Lynch conference call that Dell faces an uphill challenge if it enters the printer market, including adapting the direct-sales model to sales of high-margin ink cartridges. "We don't buy that Dell can successfully apply their PC model to the printer business," Joshi said.

HP, which dropped Dell as a reseller of its printers earlier this week, believes Dell will have a tough time competing in the printer space because it does not have the proper distribution channel or the right business model for the way people use printers. "If my daughter runs out of ink while doing a homework assignment, I need that ink cartridge right now. I can't wait 24 to 48 hours" for the cartridge to ship, Joshi said during the call. "That dynamic means we need to go to Office Depot...and buy the cartridge right away."