June 16, 2003 6:05 PM PDT

Compaq name fades from HP's lips

The Compaq name is getting pushed further aside in the no-longer-so-new Hewlett-Packard.

A year after completing its acquisition of Compaq Computer, HP is downplaying the Compaq name in its business products, arguing it is easier to sell one brand to corporate customers.

"Over time, all of your business products will become HP," Alex Gruzen, the head of the company's notebook and handheld computer unit, told CNET News.com in an interview Monday. Gruzen said it will be easier for HP's corporate sales force if all its enterprise products carry the same primary brand name.

The move represents a significant shift for HP, which had kept the Compaq name on in many of its business products, noting the brand's better adoption and reputation among IT managers when it came to laptops and desktops. In the commercial notebook market, for example, Gruzen said that Compaq machines outsold HP counterparts by a ratio of 3 to 1.

But in a crop of business-targeted portable computers announced this week, the Compaq name will show up only in a small line of type near the model number. The first model in the line, the HP Compaq NC4000--a thin and light notebook based on Intel's Pentium-M processor--does this and emphasizes the HP name instead.

In addition, the tech giant's next tablet PC, which is in the works, will feature the HP brand, rather than Compaq name that adorns the current model, Gruzen said. "What makes sense going forward is one HP brand," he said.

The company said in March that it would do away with the Evo name, one of Compaq's best-known subsidiary brands. With the move, the Compaq name becomes more of a model name, filling the role that Evo had played.

HP has already dropped the Compaq brand from many products, renaming the company's popular iPaq handhelds and ProLiant servers as the HP iPaq and the HP ProLiant, respectively. The Compaq corporate name all but disappeared as soon as the merger was closed, with one of the only concessions being the change of HP's stock ticker symbol from "HWP" to "HPQ".

Consumer Compaq
The business-hardware move contrasts sharply with HP's plans for the consumer space, where it intends to keep both brands as long as it can.

"We are never going to give this up," Gruzen said. "On the consumer side, it's still a full red-box Presario," he said, referring to the distinctive packaging and design historically used for Compaq products.

Gruzen noted that HP has been using an alternating promotional strategy for notebooks at U.S. retailers: One week, HP models are more heavily pushed, the next week, Compaq models receive greater incentives.

That leads to big shifts in market share from week to week, but has helped the two brands combined to account for more than half of all recent notebook sales, Gruzen said. Plus, he said, PC stores appreciate the fluctuations. "What retailers hate is staleness," he said.

Meanwhile, HP is also moving ahead with one of its key strategies, an initiative known as "Radically Simple, Better Together." In the push, HP tells consumers that they get a better computing experience if they go with HP for more than one type of tech gear, such a notebook and a printer.

One of the first tangible signs of the effort is a companywide move to embrace the postage-stamp-size Secure Digital memory format. By ensuring the same form of removable memory is used in HP cameras, notebooks and printers, customers will be more easily able to move a picture from an HP camera to an iPaq handheld, for example.

HP is also offering a business twist on the same idea: The new HP Compaq notebook features a button that gives one-touch control of an HP projector.

 

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