he biggest mistake I've made,'' confesses Michael S. Dell, the 39-year-old founder and chief executive of the fleet front-runner among personal computer makers, "was not getting into printers sooner."

Lately, Dell Inc. has been making up for lost time. Since it started selling Dell-branded printers a little over a year ago, shipments have risen at an encouragingly rapid pace. Mr. Dell predicts "tremendous growth" for his company's computer printer business over the next 5 to 10 years and vows to change the economics of the industry. Tomorrow, Dell plans to announce that it will begin selling printers for the corporate and home market that it claims will reduce the cost of some printing jobs by 30 percent or more.

Such talk sets Carleton S. Fiorina, the 49-year-old chief executive of the Hewlett-Packard Company, the powerhouse of the printing business, on edge. She regards Dell's declared ambitions as an irritating blend of hubris and hot air. Ms. Fiorina notes that her company's printers and cartridges, especially the inkjet printheads - clusters of nozzles, each smaller than a human hair, spurting out millions of superheated droplets a second - are the result of two decades of sophisticated semiconductor and nanotechnology research.

"Somebody doesn't just come along, particularly a company that is not an innovator, and say, 'We're going to do it better,' " Ms. Fiorina said. "Dell isn't doing anything. It's just distributing other people's products."

The confrontation between Hewlett-Packard and Dell is more than a particularly lively bout of competition in the $106 billion-a-year printing industry. It is a clash - and an intriguing test case - of two different models of innovation and corporate strategy.

With its engineering roots and its corporate tagline "HP Invent," Hewlett-Packard is committed to spending heavily on research and then funneling that home-grown technology into new products. Those products, in turn, must be able to command profits high enough to keep financing the corporate invention machine. Hewlett-Packard's printing business is a showcase of success for internal innovation. Dell, by contrast, is pursuing a "virtual" research-and-development model. It does some engineering development work itself, but that typically amounts to tweaking an existing product. Dell's main role is to scour the world for technology, fine-tune the products of corporate partners, wring costs from the supply chain and sell products directly to customers.

There is plenty of technology being developed by companies around the globe, Dell executives insist, but the technology often lacks an efficient path to the marketplace. And as it gets bigger and bigger, Dell is becoming the Wal-Mart of high technology, a marketer so powerful it can set product standards for its suppliers.

"This competition between Hewlett-Packard and Dell is a collision of two rival models of innovation," said Henry Chesbrough, executive director of the Center for Technology Strategy and Management at the Haas School of Business at the University of California, Berkeley.

Today, Dell is an upstart in computer printing compared with Hewlett-Packard. Dell sold an estimated 1.5 million printers in its first nine months in the business last year. This year, analysts estimate that Dell will sell 4 million printers or more. Its revenues from printers and ink cartridges have already blown past the $1 billion-a-year threshold, the fastest takeoff ever for Dell in a new product category.

Yet the printing group at Hewlett-Packard reported nearly $23 billion in revenue last year. It sold 43.6 million printers, more than double its nearest rival, Epson, reports IDC, a research firm. The business is big and immensely profitable: it accounted for about 30 percent of Hewlett-Packard's sales last year, but 80 percent of its earnings.

The Dell strategy is obvious: build a printer business, attack Hewlett-Packard's crown jewel and, thus, hobble its principal rival. And Hewlett-Packard is trying to return the favor by cutting prices aggressively on PC's with the goal of grabbing sales in the corporate PC market, which is Dell's stronghold.

Hewlett-Packard invests $1 billion a year in research and development for its printer division, and that spending is on display at its laboratory in San Diego. Jars and canisters of experimental ink rest alongside the chromatographs, the scanning tunnel microscopes and the thermotron environmental chambers. Anything that is not patented - Hewlett-Packard's printing group holds 9,000 - is protected by trade secrets.

Every day, physicists, chemists and fluid-mechanics engineers puzzle over ways to make the symphony of nanoscale ink explosions more efficient and precise. They speak of co-solvents, surfactants, polymers, humectants, friction coefficients and tailhooking (when the trailing tail of a misfired droplet splats wildly).

The hundreds of nozzles crammed onto the slender silicon face of the printhead march to the nanosecond beat of an integrated circuit inside the cartridge. Yet the hardware of the cartridge is only half the story. The "software" of this technology is the ink. Hewlett-Packard has more than 100 different ink formulations on the market. Three years or more of research, development and testing go into each ink variety.

Since its commercial introduction two decades ago, the inkjet printer has improved at a pace equal to Moore's Law in semiconductors - its performance doubling every 18 months. Hewlett-Packard printheads, with up to 500 nozzles, put ink on paper at the rate of 18 million droplets a second, and its labs are on track to reach 1 billion tiny drops a second before 2010. Many other companies, including Canon, Epson and Lexmark (Dell's partner and main supplier), make inkjet printers today, but Hewlett-Packard, the early pioneer, is still the technology leader, most analysts agree.

Digital photography is a challenge for inkjet printing, but also a showcase for superior technology. And printing digital photos looms as a huge growth opportunity for the printer industry, with as many as 50 billion digital photos taken last year, a number that is projected to increase steadily over the next several years. A small fraction of digital photos are printed, but Hewlett holds 50 percent of the market for those printed at home.

The really good news for the printer industry, though, is that a digital photo is an ink-eating glutton. And the ink is where the money is in printing - a classic razor and razor blade business. The manufacturers lose money on the standard home printer, but make hefty profits on all the replacement ink cartridges people buy.

"Digital photo printing is a trend that H-P is leading, and it is our single biggest growth opportunity," said Vyomesh Joshi, the executive vice president in charge of Hewlett-Packard's imaging and printing group.

Mr. Joshi sees promising growth opportunities in other markets besides digital photos. These include color laser printers, as businesses increasingly want color for presentations and marketing materials, and fast multipurpose machines for corporations that combine printing, copying and scanning, which cost up to $45,000 each.

"I want to add $2 billion every year in revenues," he said.

So far, so good. Hewlett-Packard's printer group indeed added $2 billion in revenues last year and shows no signs of faltering this year. It is too early to tell for sure, analysts say, but Dell's initial success in the printer business seems to have come at the expense of others rather than Hewlett.

Dell, according to Mr. Joshi, can sell several million printers, exploiting its strength in the PC business, and still not pose a fundamental challenge to Hewlett-Packard and its profitability. The reason is simple, he said: "We own the core technology."

A central issue for Dell in printing is how easily it can get its hands on technology that is comparable or nearly comparable to Hewlett-Packard's. Dell says there is plenty of powerful printing technology out there, and that its goal is to work with suppliers and use its efficient distribution system to lower the cost of printer cartridges.

Over time, Dell contends it can drive down the cost of printing by 25 percent to 35 percent a page. Shave a third off the cost of a standard color inkjet cartridge for a home printer, now typically $29.95, and the price tag would fall to $19.95.

Its lack of a large internal research program, Dell says, is actually an advantage. "Your reach can be extended enormously if you reach beyond your own backyard," said Tim Peters, vice president and general manager of Dell's imaging and printing business. Dell's first partner was Lexmark, the third-largest maker of inkjet printers after Hewlett-Packard and Epson. Earlier this year, Dell announced three more partners: Samsung, Fuji Xerox and Kodak. Analysts say Samsung and Fuji Xerox are strong in office laser printers, while Kodak has some intriguing digital photo printing technology.

Hewlett-Packard is in theory most vulnerable in laser printers, the workhorse of office printing, because it relies on an outside technology provider. Canon supplies the mechanical engine for Hewlett-Packard laser printers and the toner cartridges.

The technology inside a laser printer - durable, high-speed machines typically used in offices - is very different from that of inkjet printing. In laser printing, a tiny laser, making 3,000 rotations a second, zaps electrical charges on a photo-conducting roller. The toner - finely crushed bits of plastic; five equal the width of a human hair - is then picked up by the charged portions of the roller and deposited on a sheet of paper. Finally, a second, heated roller irons the toner onto the paper.

Hewlett-Packard designs the microprocessor that controls the laser's minute, manic dance, and it also develops software and handles testing and industrial design for its laser printers. Laser machines and cartridges represent about a third of the profits from the company's printing business, analysts estimate.

There is also the rising challenge of the remanufacturers, who collect used printer cartridges that they then clean, refurbish and refill. The remanufacturers sell cartridges for roughly 25 percent less than new ones from Hewlett-Packard. The quality of remanufactured cartridges, analysts say, has improved in recent years.

Four years ago a trade association, the International Imaging Technology Council, was established to develop standards for the remanufacturers. The refurbishers now account for nearly 30 percent of the laser toner cartridge market.

Dell has turned heads with the brisk sales of its printers - rebranded Lexmark machines with a few clever features, like the equivalent of an ink-cartridge gas gauge that alerts the user when ink is running low and links to the Dell Web site for reordering.

But it has not yet changed the economics of the printing business. In fact, according to Jim Forrester, managing editor of The Hard Copy Supplies Journal, Hewlett-Packard's cost per page is less than Dell's.

Things are just beginning, Mr. Dell replies. "Stay tuned; there's a lot we can and will do," he said. A better business model, he explains, will beat a better technology, and he insists the odds are on his side in the printing business over the long run.

"The days of engineering-led technology companies are coming to an end," Mr. Dell declared.

For her part, Ms. Fiorina will take that bet. "We're the biggest,'' she said. "We're the best, and we're getting better in a growing market."