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Hewlett-Packard to Offer 100 New Printing, Imaging Products

Posted on: Monday, 11 August 2003, 06:00 CDT

Aug. 11--Get ready for Big Bang Two. At a press conference scheduled for today in New York, Hewlett-Packard Chief Executive Carly Fiorina is going to unveil the first of more than 100 new consumer printing and imaging products.

The list includes printers, scanners, digital cameras that play slide shows on TV sets, computers, all-in-one office product machines and even a new kind of paper that improves the printing of black-and-white photos.

Last year, HP launched Big Bang One. The company said it spent $1 billion on the research and development necessary for launching 100 new printing and imaging products. Those products helped vault HP to a 41 percent share of the overall worldwide printer market.

With Big Bang Two, HP isn't expected to push new technology so much as create a broader vision for its consumer products and where they can be used. Much of the new gear will work with Bluetooth or WiFi, two wireless technologies that make it easy to hook products together, pass lots of data between them and hook up to the Internet.

"Big Bang Two is going to be a broader strategy to put HP in a better position to cater to consumers where the emphasis is on good packaging, ease of use, integration and connectivity," said Angela Boyd, a vice president and imaging analyst at market researcher International Data Corp. in Framingham, Mass. "HP wants to expand from information technology to being a classic consumer company."

A big part of the original Big Bang was underlying technology. HP created new ink-firing heads for its ink cartridges, with 416 nozzles that could drop 18 million droplets of ink per second. That compared to ink-firing heads in 1985 that had 12 nozzles that could drop 1,000 droplets of ink a second.

This new technology has helped refine print quality and helped the company stay ahead of its rivals, according to executives like Pradeep Jotwani, head of HP's printer-supplies business. And the innovations aren't all aimed at high-priced products, Fiorina has pointed out in various speeches. The $49 inkjet printer that HP launched with Big Bang One required research that yielded more than 100 patents.

Today, HP is expected to unveil six new photo printers, three digital cameras, two all-in-one printer/fax/scanner/copier combination machines, two scanners, a new kind of photo paper and a cartridge for printing better black-and-white images.

Among the features on the printers are card readers that take photo memory cards and let someone print directly without first transferring the images to a computer.

A new digital camera shuts off the small display screen to save power when someone is looking through the eyepiece. These little features add up to better quality and ease of use for consumers, said John Solomon, vice president in HP's printing and imaging group.

An example of a new hybrid computer/consumer product is the DVD Movie Writer DC3000, a $399 product that makes it easy to convert VCR videotapes and old camcorder tapes to a digital form stored on a DVD. The box attaches to a computer and allows the user to easily create professional-looking home movies.

Other products in the Big Bang Two announcement are coming later this fall.

The new products will be key to maintaining HP's share in printing and imaging. In the first quarter, HP had 41 percent of the worldwide printer market, compared with 37 percent a year earlier, according to IDC. Epson, its next closest competitor, had 24 percent.

HP is such a powerhouse in printing and imaging because it has huge economic advantages. Jotwani says HP makes so many printer heads with intricately designed micro electro-mechanical machines, or MEMs, that its consumption of silicon is equal to about 60 percent of the amount Intel uses to make chips in a year.

Fiorina has said HP is the biggest consumer company in the world with more than $18 billion a year in consumer sales. But Japan's Sony reports bigger revenue numbers so it isn't clear why she says this.

But it is true that as consumer electronics moves from analog to digital technologies, the traditional giants like Sony, Philips Electronics and Matsushita's Panasonic will face more and more competition from computer companies like HP.

HP is already in the thick of competition with these companies in the digital camera business. HP buys its lenses from Japanese suppliers but HP creates the software and imaging electronics. But it isn't clear how far Fiorina wants to move into direct competition with companies like Sony and Samsung, which have many advantages because they manufacture so many of their own components from memory to displays.

Meanwhile, in the traditional printer business, HP has to stay focused in order to compete with more specialized opponents like printer maker Lexmark, which has a 9 percent share. "I don't see any signs that they're going to lose any share in printing," said Boyd. "They should continue to grow."

Over time, Fiorina needs to get more hits in order to establish HP's credibility in consumer electronics. Five or 10 years from now, says Boyd, HP doesn't want to get all of its printing and imaging profits, as it does now, just from selling ink cartridges.

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(c) 2003, San Jose Mercury News, Calif. Distributed by Knight Ridder/Tribune Business News.

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