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Commentary: HP bets buyers think one box is better than three

Hewlett-Packard is targeting a growing market segment--first-time computer purchasers--with its all-in-one package available exclusively through Wal-Mart.

By Kevin Knox, Gartner Analyst

Hewlett-Packard is targeting a growing market segment--first-time computer purchasers--with an unusual computer/monitor/printer package based on HP's successful Pavilion PC platform and available exclusively through discount retailer Wal-Mart.

As one of the few manufacturers of CPUs,

See news story:
HP thinks inside the box with PC package
monitors and printers, HP is uniquely positioned to offer consumers all three components in a single package. The company hopes simplicity, ease of setup, and a highly competitive price point--branded with a respected name in the PC industry--will make the unit attractive to first-time purchasers and other buyers of comparatively low-end PCs.

The all-in-one approach offers consumers the convenience of one-stop shopping and a simplified setup. The concept has definite advantages for HP as well, including cost efficiencies, greater rebate and discount flexibility, and increased ability for cross-product integration.

This offering is not without its drawbacks. All-in-one units will be of little interest to corporate purchasers, consumers who already own one or more of the components, or high-end consumer buyers, who generally prefer purchasing best-of-breed components separately.

Retailers have to manage inventory especially carefully, since the box bundle cannot be broken apart and sold separately.

Gartner expects to see this type of offering in stores focusing heavily on the first-time, low-end PC buyer--not all retail stores. The more sophisticated the user and the higher-end the system configuration, the less attractive this offering will be.

Nonetheless, the all-in-one units should be successful, especially when marketed carefully through retailers such as Wal-Mart, which are popular with first-time buyers and other comparatively unsophisticated computer purchasers.

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Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.