HP gears up post-merger PCs
By John G. Spooner
Staff Writer, CNET News.com
June 25, 2002, 1:30 PM PT
NEW YORK--September will be a make-or-break month for Hewlett-Packard's new Personal Systems Group. That's when computer buyers will find out about the company's first completely new PCs since its merger with Compaq Computer.
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HP has released a small number of new PCs since the merger was sealed in May, but those were under development prior to the completion of the deal. These will be the first completely new post-merger consumer and commercial PCs.
HP is still working out many of the details of the new machines. It will conduct a series of focus groups with customers in July and August to learn more about what customers want.
However, it's safe to say new HP-branded Pavilion and Compaq-branded Presario desktops and notebooks for consumers will share some hardware components to cut costs, but will maintain a distinctly separate look and will use different software to appeal to a variety of buyers and better compete with the likes of Dell Computer.
"We will leverage on the commodity parts of the desktop: motherboards, memory and optical drives," Will Townsend, the Personal Systems Group's marketing manager for the Presario line, said Tuesday in an interview at the TechXNY show here. "It will allow us to lower (prices) at the lower end. On the higher-end PCs, it will allow us to offer components like DVD+RW drives."
Consumer desktop PCs are some of the first new HP products affected by the merger. To reduce overlap, the company adjusted the features and prices on its HP Pavilion and Compaq Presario consumer desktops aimed at the back-to-school market.
HP Pavilion PCs will range in price from $529 to $1,799 and will focus on digital imaging, while Compaq Presario machines will aim at the more value-oriented buyer. They will range in price from $549 to $1,199, representatives said.
Pavilion desktops will offer some features not found on Presario machines, such as HP Memories, a software application that lets users create digital slide shows with music and titles and save them to a DVD disc. HP will continue to drive sales of PC bundles by pre-loading drivers for its printers on Pavilion machines and offering rebates for people who buy the PCs with HP monitors, printers, cameras and scanners, representatives said.
Presario PCs will aim at the value-conscious crowd with models such as the Presario 6000, which includes an AMD Athlon XP 1800+ chip, 512MB of RAM, a 60GB hard drive and CD-rewritable and DVD drives. It will sell for $849.
HP will take a somewhat different approach with its notebook computers.
While HP Pavilion notebooks and Compaq Presario notebooks will both integrate wireless technologies, such as 802.11b, they will use different color schemes and chassis and come with different software. HP will use this strategy to guide its new Pavilion notebooks toward the consumer, while aiming the Presario more toward small-business users, said Jonathan Kaye, product marketing manager for mobile in HP's Personal Systems Group.
Meanwhile, though HP plans to phase out its HP Vectra line of commercial desktops, it will add several elements of those PCs to its remaining Compaq Evo desktops.
One of its first new commercial PC products will be a redesigned version of the ePC, which will be rebranded as a Compaq Evo D500 PC. The machine will ship this fall, likely in September, for a price starting around $700, said Jeff Groudan, the Personal Systems Group's head of commercial desktop marketing.
While the company is working on a short-term plan to get its new, somewhat differentiated PC products out the door, it has a much bigger plan in mind for the future.
HP's longer-term goal is to better integrate many of its products. The company is considering bundling notebooks with various imaging products, such as digital cameras, and creating wireless-hub devices that would more easily connect the wide variety of PCs, handhelds and printers HP sells, Groudan said.
HP could start with something simple, like bundling its Evo D300 commercial PCs with printers at some point, Groudan said. But "the long-term vision is...integration across product families."
The company is evaluating, for example, "Bluetooth hubs to get Evo, iPaq and our consumer products all to work together seamlessly without having to press a button," Groudan said.
The hub device, shown in HP's private meeting room, consists of a little black box that combines the Bluetooth wireless specification and USB (universal serial bus) ports with a pair of speakers. If the gadgets gain favor with customers this week, HP could begin selling them by the end of the year.
"We think there are some unique opportunities that only HP has got in terms of (seamless) integration" of a lot of those PC products, Groudan said--opportunities not available to competitors such as Dell.
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