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HP, Qwest mull e-PC distribution pact

Hewlett-Packard's new e-PC computer could become part of a broad new e-commerce partnership between the firm and telecommunications company Qwest.

LAS VEGAS--Hewlett-Packard's new e-PC computer could become part of a broad new e-commerce partnership between the firm and telecommunications company Qwest, an HP executive said.

HP and Qwest are talking about an arrangement underComdex: Closing the millennium which Qwest would supply companies with these upcoming, simplified business computers, Mike Weir, marketing manager for business PCs at HP, said at the Comdex trade show here today.

If the arrangement comes to pass, it would be the first indication that HP is getting something other than heavy-duty back-end hardware into its ambitious "e-services" plan. It would also be an expansion of Qwest's current agreement under which HP supplies Qwest with back-end hardware.

HP has said that these e-service deals haven't yet brought in much revenue, but they have opened doors to new companies.

Separately, the company today posted quarterly profits of $760 million, or 73 cents per share, compared with year-ago figures of $710 million, or 72 cents per share. For the three-month period, HP had revenues of $11.4 billion, up from $10.3 billion for the same period in 1998, but the company has had trouble staying abreast of rivals like Sun Microsystems. HP's earnings were in line with lowered analyst expectations. (See related story)

Qwest and HP are "looking at the whole possibility of getting information appliances to the end users," Weir said in an interview. "We want to be able to offer the whole thing"--a situation where the "client" computers would be preconfigured for the task at hand.

Qwest already is one of HP's biggest e-services partners.

Under one current deal, HP helps with Qwest's service of renting out access to business software so companies don't have to bother installing the software themselves. It's a type of business called an "application service provider," or ASP. In the deals with Qwest, HP provides server computers and support at no cost to Qwest, and Qwest gives back a portion of the fee it charges companies to rent the software.

In another deal with Qwest, HP provides storage software and telecommunications companies rent access to it.

HP's e-PC is a small, basic computer in a sealed case, aimed at corporate buyers. It's conceptually similar to the Eon machine from IBM, Dell Computer's Webster and Compaq Computer's iPaq.

These colorful, sealed-case computers don't have all the features of an ordinary PC, but they're beefier than Sun Microsystems' SunRay 1, for instance, a "thin client" that has a central processor and network connection but little else. Database company Oracle also is working on a thin client with no hard disk and using the Linux operating system. Oracle chief executive Larry Ellison told CNET News.com earlier that the company would spin off a company to make the $150 devices.

HP also is trying to bring its printer business into the e-services plan, chief executive Carly Fiorina said at a keynote address here.

A number of technologies under way at HP could let people take advantage of electronic services tying printers to the Internet. Through its May acquisition of Dazel, HP got software that delivers paperwork such as purchase orders electronically instead of by fax, mail or other older distribution methods. Earlier this month, HP announced a combination printer/copier that also can email documents. And HP is working on new digital cameras that will be able to print directly to nearby printers.