August 26, 2004 10:14 AM PDT

HP's iPod to lead consumer push

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Hoping to make a big bang in consumer electronics, Hewlett-Packard plans on Friday to unveil its long-awaited HP-branded iPod, along with its first televisions, an entertainment hub and the usual array of new printers and cameras, sources said.

Also among the dozens of new gadgets that HP CEO Carly Fiorina will introduce at a Miami press event is the company's first digital projector for consumers, a product the company has been developing for some time. HP has been working on the projector, already a business staple, for more than a year.

News.context

What's new:
On Friday, Hewlett-Packard plans to unveil its HP-branded iPod along with a pile of other consumer gear, including its first televisions, an entertainment hub and the usual array of printers and cameras.

Bottom line:
Positive news on the consumer front wouldn't hurt after a disappointing quarter on the business side. The iPod is important both as its entree into the music market and as part of HP's strategy to become "cool."

The iPod, while expected to be similar to Apple Computer's version, is important both as the company's entree into the music market as well as a part of HP's strategy to become cool enough to be allowed in the living room.

"There is nothing hipper and nothing cooler than an iPod," said Gary Peterson, an analyst with Gap Intelligence, a San Diego-based market research firm. "They have to stop being a boring old printer and server company."

That's especially key for HP's desire to sell things like televisions, where having an appealing brand matters. As for its televisions, HP is expected to introduce 42-inch plasma televisions in both extended definition (ED) and high-definition (HD) formats, along with 26-inch and 30-inch LCD televisions. HP also plans to introduce a digital storage console as part of the "entertainment hub" concept Fiorina outlined at the Consumer Electronics Show in January.

HP's chief technology officer, Shane Robison, talked briefly about the TVs at a conference this week in Aspen, Colo. On Thursday HP issued a media alert for the "unveiling of new digital photography, music and entertainment experiences." However, the company declined to talk in detail about the new products that would be introduced on Friday.

HP will face retail shelves already crowded by TVs from PC rivals. Gateway and Dell also sell several LCD TVs each. Gateway already sells plasma TVs, and Dell has said it will offer them later this year.

Dell charges $1,399 for a 23-inch LCD TV and recently dropped the price of its 30-inch LCD TV by $300 to $2,499. Gateway charges $1,499 for its 23-inch model, $1,999 for a 26-inch LCD TV, and has also lowered the price of its 30-inch LCD TV to $2,499. Gateway offers two 42-inch plasma TVs: a $2,499 extended definition model and a $4,499 high-definition model. Gateway sells a 50-inch HD plasma TV for $4,999. HP is expected to specify pricing on its models when they're unveiled on Friday.

Friday's launch is part of what has becoming an annual tradition of launching the bulk of the company's consumer products at one event. The original Big Bang in 2002 showcased the revamp of HP's entire printer lineup, while last year's sequel had 158 new product introductions, including a see-through scanner and a 17-inch notebook.

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CNET's James Hilliard talks to HP's David Conrad.

The company could use some good news from the consumer front after a disappointing quarter on the business side. Lower-than-expected earnings prompted Fiorina to sack three top executives.

HP has been waiting patiently to be able to offer its iPod. The company had originally planned to offer a model this summer based on Apple's third-generation design. However, the company decided to wait until September to ship the iPod to use the new "click-wheel" design. HP's version is expected to be similar in price to the Apple models; the 20GB iPod sells for $299, while the 40GB model sells for $399.

Print money
While the TVs and iPod-a-like may provide most of the flash at Friday's event, the mainstay for HP's bottom line will probably be its new crop of printers. The printing unit still accounts for the bulk of HP's income, led by the highly profitable ink and toner business.

On the printer side, HP's latest efforts are largely focused on photo printers and all-in-ones--machines that act as printer, scanner and copier. Many of the new printers feature small color displays to allow photo printing without connecting to a computer, according to a source familiar with the company's plans.

HP is expected to tout the affordability of digital photography as well as its entertainment value.

With its cameras and photo printers, HP is expected to tout the affordability of digital photography as well as its entertainment value. Two of the new printers are mobile devices that can be used at events such as a wedding or party. Adding an LCD screen to those models is intended to make printing easier.

The company also has improved models for its traditional photo printer line, expanding the use of a gray ink, which produces better black and white photos and also gives HP another ink cartridge to sell.

Bluetooth wireless is also a feature on more new models, with HP hoping that many people with cell phone cameras want a quick way to print photos.

"It's definitely a new avenue for them to try," Peterson said. "Any possible way they can sell ink, they are going to give it a spin."

Who wants to be a paparazzo?
Although camera phones produce relatively poor images, they are becoming increasingly common. Most importantly, people have them handy for such spontaneous moments as running into a celebrity, Peterson said. They are also popular for less savory opportunities, he said, such as cheating on tests and catching photos that people would rather not have taken.

"Regardless of the fact they are naughty, these images have importance to store, to print and to share."
--Analyst Gary Peterson
of Gap Intelligence
on camera-phone images

"These images, regardless of the fact they are naughty, these images have importance to store, to print and to share," Peterson said.

HP is also expected to unveil a set of new digital cameras that continue the company's departure from boxy, lower-end models. "They've had really ugly products," said Paul Worthington, analyst with research firm Future Image.

HP's Photosmart R707 camera, introduced earlier this year, represents an attempt to change that legacy. The product, a 5.1 megapixel camera selling for $349.99, was built with the help of Texas Instruments and features a sleek design.

"They are working hard to introduce more stylish digital cameras with more advanced features," said Michelle Slaughter, an analyst at research firm InfoTrends.

Still, the company faces stiff competition in the digital camera arena. According to analysis firm IDC, HP ranks sixth in the United States in terms of market share. Sony is tops, followed by Kodak and Canon.

One product that won't be ready this year is the LightScribe technology Fiorina talked about in January. LightScribe uses a laser to etch a label directly on to a CD or DVD. The company has been signing up software, disc and drive makers to adopt the technology, but an HP representative said PCs and drives with LightScribe won't be available until early next year.

CNET News.com's Ed Frauenheim and John G. Spooner contributed to this report.

2 comments

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Waste Of Money
Personally and objectively I would say that Light Scribe technology is a waste of money as it takes way too long for the label to be burnt onto the CD as a label.

I think there are better technologies around that can blow them away.
Posted by alawana (20 comments )
Reply Link Flag
Waste Of Money
Personally and objectively I would say that Light Scribe technology is a waste of money as it takes way too long for the label to be burnt onto the CD as a label.

I think there are better technologies around that can blow them away.
Posted by alawana (20 comments )
Reply Link Flag
 

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