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New HP systems want market share

Hewlett-Packard ships three notebooks and several desktops--including a $949 system--in an effort to take business away from its competitors.

Largely sidestepping the inventory bloat that undermined other major PC vendors last quarter, Hewlett-Packard today released an array of desktops and notebooks priced to take market share away from its competitors.

The company also laid out a road map for streamlining its distribution system, in an effort to reduce costs.

HP's announcements were buoyed by results from International Data Corporation showing that the company's PC sales grew at 69 percent in the first quarter compared with the same quarter a year before. (See related story)

At these growth rates, HP will be able to achieve its goal of becoming one of the top three desktop and top five notebook makers by 2000, mostly through taking business from existing vendors, speculated Jacques Clay, general manager and vice president of HP's commercial computing division.

"Most of our growth will come because we will be stealing market share from the top-tier players," he said. "We see accelerated consolidation in the industry. We see it on the PC side, we see it on the workstation side, and we will see it in the portable side."

On the notebook front, HP introduced the OmniBook 4100, a slim-line notebook for the executive class. Roughly the same size and shape of the ThinkPad 600 due out from IBM tomorrow, the 1.4-inch thick 4100 comes with Pentium II or Pentium MMX processors running at 233 MHz and 266 MHz, 14-inch screens, and 4GB of hard drive space.

Prices begin at $3,499. HP has not had a notebook at this form factor before.

For more budget-conscious users, the company released the OmniBooks 3100 and 2100. These notebooks, which extend existing product families, come with Pentium MMX processors running at 200 MHz, 233 MHz, or 266 MHz and are available in a variety of memory and hard drive configurations. The 3100 comes with a 13-inch screens while the 2100 comes with a 12-inch screen.

For desktops, HP announced midrange and budget versions of its Brio desktops using the Celeron processor from Intel. The Brio 8300 series will come with 266-MHz Celeron processors and start at $949 for a system with a 2.1GB hard drive.

In addition, Brio 8500 models are expected to sell for as low as $1,599 for a machine with a 350-MHz Pentium II and a 4GB hard drive. Higher-end versions with a 400-MHz Pentium II, an 8GB hard drive, and more memory will sell for $2,100 and up. These computers will begin to roll out in May.

HP will also roll out more products in the Windows CE area. "You will see fuller solutions, new form factors, bigger and smaller form factors," Clay added.

Beyond products, HP is in the midst of reinventing its distribution and manufacturing systems. Importantly, the company will not abandon its reseller base, but will continue to sell its products mostly through a network of dealers, Clay promised.

To make its distribution process more efficient and to create a better relationship with the end customers, however, HP has launched a series of initiatives that will progressively be rolled out over the course of the year.

The Top Value program is already close to 90 percent complete. Under this program, HP identifies a few high-volume models in its product lineup and provides additional discounts to reseller customers who order them.

A channel assembly program, meanwhile, will begin to take shape during the summer. Under this program, HP will ship components to select resellers, who will then assemble the machines pursuant to customer orders. Not only will this allow end users to buy more customized machines, it will also reduce inventory down to two weeks.

Also this summer, HP will launch an electronic communication initiative with its major customers. Through Web links, HP will better be able to understand the customer's buying patterns and product demands. At the same time, the customers will "know what they can get three months, six months, and nine months down the road," he said.