May 1, 2000 12:55 PM PDT

Fiorina touts HP's drive into Internet market

NEW YORK--Hewlett-Packard chief executive Carly Fiorina today gave investors a progress report on HP's growing role as a provider of Internet infrastructure and services.

Fiorina made her case to investors here at the Merrill Lynch Hardware Heaven Technology Conference at the New York Palace Hotel, asserting that the company is well on its way to restoring the health of its server business, while it aggressively targets printing opportunities in the growing Internet appliance realm.

Fiorina hinted at an announcement the company is set to make today with Compaq Computer CEO Michael Capellos, which will "revolutionize supply chain management."

Although HP is in the quiet period surrounding the end of its second quarter, preventing Fiorina from delving into specific numbers and figures, the chief executive did continue her pitch that the PC maker is shifting its strategy to embrace online services, including Web-based printing and network storage.

"The pure product era is over," she said, and it is being replaced by an emphasis on the services wrapped around products, especially Internet-based services.

HP is developing printing services for information appliances, including personal digital assistants (PDAs), smart cell phones and TV consoles. The company today unveiled a deal with AT&T to make printers for the communications company's interactive TV consoles, Fiorina said, calling printing the "killer app" for TV-based online services.

"We're focusing on transforming the whole experience of printing and imaging," she said.

In its corporate product line, the company is focused on repairing the damage done to its server businesses by "two self-inflicted wounds," according to the executive. HP suffered as a result of holes in the low-end of its product line "wide enough for Sun (Microsystems) to drive a truck through," and missteps among its sales teams. It is on the road to solving both problems and reclaiming market share from rival Sun, she added.

Fiorina echoed recent comments from other tech executives, proclaiming the PC alive and kicking despite the influx of low-end Internet appliances, which HP is also targeting. Its PC business is healthy and profitable, she said, and the company will stick to its mix of channel and direct distribution.

"We don't think the PC is dead," she added. "We feel good about the way we've been able to walk the line."

 

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