August 11, 2003 11:33 AM PDT

HP offers 'simple' message to consumers

Hewlett-Packard wants to take the work out of working with computer gear.

The Palo Alto, Calif., computing giant as expected on Monday outlined a new approach for helping computers, printers, digital cameras and other consumer computing gear work together in a manner that is simpler than before.

The company, using a loft in Manhattan as its launch pad, introduced the strategy, dubbed "Radically Simple, Better Together," and a total of 158 new products.

With the strategy, which HP has been cooking up for some time, the company aims to better connect its portfolio of products with methods ranging from adopting common user interfaces to adding wireless networking and common memory card slots to all its consumer devices. HP hopes that better connectivity will lead to consumers picking its products across the line for homes or small businesses. Similarly, Sony has been able to link the success of one product line to another through its Vaio strategy.

The idea is that consumers could swap files from an HP computer or a camera to another HP device such as a printer or a handheld by using wireless links or a single memory card. Currently, HP's printers and cameras mainly use cables to connect to a PC, and various memory cards aren't always compatible with each other or with a PC.

HP's new products range from a new printing and imaging software suite to an array of printer, scanner and camera models. The launch, which also included new PCs, is the biggest ever for the tech giant. It has been dubbed "Big Bang 2" in reference to last year's complete overhaul of the consumer printer lineup.

"This is the largest launch in our company's history. To put it in perspective, we are introducing today almost as many products as there are candidates for the gubernatorial race in California," Carly Fiorina, HP's CEO, said during a Webcast of the event in New York.

HP's big bang
Count 'em: Hewlett-Packard totes up 158 new products in its biggest-ever product launch. Items headed for store shelves this year include an 8-color photo printer and a 17-inch notebook.

Product Main feature Price/availability
  Pavilion zd7000 notebook

    17-inch screen     $1,499/Aug.  
  Photosmart 7960 printer

    8-color ink     $299/Sept.  
  Photosmart 7760 printer

    LCD screen for photo preview     $199/Aug.  
  PSC 2510 all-in-one printer

    wireless connections     $399/Oct.  
  Photosmart 945 camera

    adaptive lighting     $549/Sept.  
  Photosmart Mobile Camera

    for iPaq handhelds     TBA/Oct.  
  Scanjet 4600

    see-through cover     $149/Sept.  
  DVD Movie Writer

    videocassette-DVD transfer     $399/Sept.  
Source: Hewlett-Packard

The Big Bang 2 brings fresh products at a critical time for HP. Printing and imaging products are the company's lifeblood, making up a huge portion of its quarterly revenue. But despite company executives stating their belief that HP can cut costs and take market share from rivals, analysts have remained wary. Last week, several analysts lowered their expectations for the company's third fiscal quarter earnings, due Aug. 19. Most said economic weakness in Europe and Japan could counter better-than-expected U.S. sales. Europe is a traditional HP stronghold.

HP garnered 54 percent of the worldwide printer market in the first quarter, making it the top printer company. But, despite seeing its PC unit shipments increase during the second calendar quarter, it still trailed rival Dell in the worldwide shipments. Dell also continues to grow much faster than HP.

All together now
Unlike Big Bang 1, Monday's extravaganza is aimed at improving how products work. Using its new goods, HP said, a person could go to a wedding with a digital camera and a printer and following the event could create a wedding photo album for the bride and groom. The album would arrive weeks earlier than a traditional album, because the photos could be transferred to and quickly printed on an HP printer. A person could also easily transfer home movies from a video cassette to a DVD or take music on a trip with HP's new products, the company said.

"In the digital era, you are the photographer and the photomat," Fiorina said. "You are the recording studio and the (disc jockey). You are the story teller. This is about completely rethinking photography?music?the way you communicate."

One of HP's biggest challenges is to continue its momentum as its primary markets mature. With printers and PCs becoming commodity items, analysts say HP needs to find new ways to convince buyers to upgrade and, when doing so, to purchase its products rather than those of competitors.

"You have to give people compelling reasons to replace (a device) and to buy your solution," said Steve Baker, an analyst with NPD Group. "A compelling reason, going forward, is going to be the idea that, as more of my devices (such as cameras) turn digital, I need to make them work together."

Apple, Gateway and Sony are taking similar approaches, Baker said, touting products that work better together if a customer chooses a single brand. HP's products center on PCs and printers, while Gateway bases many of its products around television.


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The refashioning of HP
Carly Fiorina plans to accelerate
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retaining the positive legacy
embodied in the famed "HP Way."


"The whole idea is, if you buy from one company, there's got to be a compelling advantage beyond just price," Baker said.

HP unveiled several new photo printers, including the $299 eight-ink Photosmart 7960, which offers more realistic, longer-lasting photos in both black-and-white and color. The company also unveiled the PSC 2510, a $399, all-in-one Photosmart printer with wireless networking capabilities.

HP also launched digital cameras, including the 5.3-megapixel Photosmart 945, a camera the company says can capture more realistic images. The camera will ship next month and cost $549.

Monday's list of new gadgets includes a 1.3-megapixel camera for iPaq handhelds and a Digital Media Receiver for sharing multimedia files between household electronic devices and a PC. The HP DVD Movie Writer dc3000 converts home movies stored on video cassettes to DVDs.

In an interview, HP Executive Vice President Vyomesh Joshi said the company has poured 100,000 hours of work over the last year into the new crop of gear. The company also plans to spend $300 million of its advertising budget to tout this consumer effort, Joshi said.

"When we worked on (the original) Big Bang, we realized this is the right way to introduce big concepts," Joshi said. "Otherwise, every time we introduce a new product, we talk about speeds and feeds."

It's safe to say, then, that there will be a Big Bang 3?

"That's the intention," Joshi said. "We want to continue to innovate."


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HP's expectation is that, by making the products more useful both alone and especially together, it can make its products more desirable, therefore improving its own sales and blocking competitors like Dell. HP and Dell have been butting heads in the consumer market since Dell's entry into the printer market.

To help show its new strategy to consumers, HP will demonstrate its new products in special "experience centers," staffed by its employees, at retail stores such as Circuit City and CompUSA.

Joshi said that, unlike Apple Computer, the company has no plans for opening its own stores, as Apple did to showcase its products working together.

"We believe that our retail channel partners are great right now for what we want to do," Joshi said. "We don't need to open our own stores."

CNET News.com's Ina Fried contributed to this report.

 

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