HP tailors PCs to specialty tastes

HP plans to introduce a number of specialized PCs in the coming weeks, including a desktop machine aimed specifically at gamers. The new PCs will serve as a follow-on to the collection of scanners, cameras and printers that HP introduced on Monday as part of a strategy aimed at convincing consumers to stick with HP for all of their tech purchases.

The gaming machine will be under the Compaq brand and feature a top-of-the-line processor and graphics as well as a larger case to hold the additional cooling equipment needed to get peak processor performance.

The model, which will arrive in limited distribution this fall, is being made at the request of several retail chains, said Sam Szteinbaum, vice president of HP's North American consumer PC unit. "We are going to do this program and learn from it," he said.

In introducing a gaming PC, HP is going after niche players such as Alienware that have specialized in such machines. Gateway and Dell have also targeted the small but lucrative market.

Although the gaming PC will be heavy on hardware, HP will include less general-interest software than it typically bundles with consumer PCs. "We won't load it up with a lot of stuff that those people don't want or value."

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HP also plans to introduce the Photosmart PC, a line of desktop computers geared toward digital imaging enthusiasts. The machines, which will wear the HP badge, will have a dedicated space to accommodate a dock for connecting an HP digital camera and will also have HP's Image Zone software.

"With respect to digital imaging, we believe that the current processes are very complex--taking a picture, creating a collage, printing them out, sharing them..." said Vyomesh Joshi, the executive vice president in charge of HP's printing and imaging business. Joshi said that HP's challenge is not just to come out with faster printers and more megapixels, but to have products that make the whole process easier and more appealing.

Differentiation is the name of the game in desktops these days. Because PCs are made out of the same basic parts, manufacturers have been looking for ways to distinguish their boxes from the crowd. Approaches have included offering more software or concentrating on the PC's design. Sony, for instance, includes special DVD authoring software and other programs that aren't found on other PC brands. Gateway has been pushing the PC along with additional gear, such as its 42-inch plasma televisions.

Because the PC business is maturing, manufacturers are now looking to find niches where growth rates and selling prices are still relatively high, NPD Group analyst Steve Baker said.

"How do you get more market share? One way is to slice the market up and go after small pieces. You want to find those niches and get into those," he said. "Gaming PCs, to people that appreciate the value of everything that a gaming PC provides, have a high value. The gaming PC market, for example, isn't going to be made up of a lot of $799 PCs."

Szteinbaum said that the Photosmart PC will likely be offered in a range of prices. HP is also selling a camera dock as a $79 add-on for existing PCs.

Although the company is developing more consumer software as part of its new push, Szteinbaum said the company is not getting in the business of selling packaged software.

"It's not software that's going to be sold externally," he said. "It's our way of differentiating and making sure our products are easier to use."

For some time, HP has been working on a strategy it calls "Radically Simple, Better Together," which is aimed at creating digital gear that is easier and works well in combination with other HP products. In doing so, the company is following a now well-trodden path of trying to use the PC as a digital hub. Apple Computer and Sony have been pursuing similar strategies.

HP is also planning to expand its HP-branded line of computers that run Microsoft's Windows XP Media Center edition by adding a notebook computer, Szteinbaum said.

HP has been experimenting with ways of balancing its HP and Compaq brands. Although the company has spoken of HP as its more multimedia brand and Compaq as more about features for the buck, in practice the two brands often compete head-to-head on retail shelves. Another method HP has used is to promote one brand and then the other on alternate weeks, an approach that company executives say has helped build overall market share in retail sales.