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Fiorina sees darkness on tech horizon

Hewlett-Packard's chief executive opens the CeBit trade show on a sour note, predicting that the technology spending slowdown that has afflicted the United States is migrating to Europe.

HANOVER, Germany--Hewlett-Packard Chief Executive Carly Fiorina opened the CeBit trade show on a sour note Wednesday, predicting that the technology spending slowdown that has afflicted the United States is migrating to Europe.

"This slowdown is now clearly spreading to other parts of the world," Fiorina said, speaking at a news conference a day before the official start of the vast European computer trade show. "Candidly, I am not optimistic about Europe's ability to withstand a slowdown."

The words are significant in light of remarks earlier by HP and competitors such as Sun Microsystems, which had previously pointed to strong European sales as a bright spot that contrasted with the North American slump.

And the near future, though difficult to predict, is looking worse. "I'm not optimistic about recovery in the second half of this year," she said. "It is a little bit like navigating through the fog."

Michael Dell likewise has questioned the general expectation that a recovery is foreordained for later this year. The CEO of Dell Computer on Tuesday was quoted by the Reuters news agency as saying: "Somebody says things are going to recover in the second half. Well, why is it going to recover in the second half? Because it's not in the first half. That doesn't make a lot of sense."

HP's revenue growth, which averaged about 15 percent through 2000, will drop to 2 percent for the first quarter of 2001, Fiorina said. "At this point we are not assuming any improvements throughout the remainder of our fiscal year," which ends in October, she said.

Fiorina also unveiled a new partnership that will help advance HP's vision of spreading computing services across all sorts of devices. The company's Jornada handheld computers will be mounted on the dashboards of cars built by Gedas, a subsidiary of Volkswagen. The computers will help drivers diagnose mechanical problems with the car and, with the help of an Internet site hosted by HP, find maps and weather reports and avoid traffic problems.

At the CeBit show, HP also unveiled a number of new gadgets, most notably a lower-priced Jornada handheld computer and a new combination handheld-cell phone.

The new Jornada 525 uses Microsoft's Pocket PC software, far less popular than the Palm OS that powers handhelds from Palm, Sony and Handspring, but gaining some ground in Europe. Palm earlier this week unveiled new models with expansion slots, while Handspring filled out the top end of its product line.

HP didn't announce the price for the new 16MB, color-screen model, but as the company's new entry-level product, it will likely cost less than the $499 model that previously was the least expensive. Palm and Handspring models, though they come with less memory, are available for well under $200.

Bernard Meric, general manager of HP's consumer business in Europe, also showed a combination handheld computer-cell phone. He declined to discuss specifics about the gadget, which still is under development.

HP also announced a digital camera that plugs into a Jornada's CompactFlash slot, equipment from other companies that allow a Jornada to communicate with the Bluetooth wireless standard, and Bluetooth-enabled inkjet printers.

Sharp in the act
Sharp Electronics is making moves of its own in the handheld market.

At its own CeBit news conference, the Japanese electronics giant showed off a handheld computer called the MultiMedia Tool, based on the Linux operating system, that can play MPEG4 videos and MP3 music.

Sharp's handheld comes with a pullout keyboard, a 320-by-240-pixel full-color screen and 32MB of memory, and it can connect with Universal Serial Bus (USB) and infrared connections. It is equipped with a Secure Digital slot, the same expansion port technology used by Palm. Its software enables it to surf the Web, check e-mail, organize appointments and synchronize data with a PC.

Sharp currently sells handhelds using its own, proprietary operating system under the Zaurus label.

Reuters contributed to this report.