HP, The "P" Stands For Photo

ORLANDO, FLA.— Hewlett Packard is looking to push its digital imaging business far beyond selling cameras, an intention revealed at CES but formally unveiled at the PMA show, held here in late February.

The company, which is among the top five market leaders in consumer digital camera sales, announced its intentions to grab a slice of the $14 billion consumer photofinishing pie with the introductions of high end labs in partnership with Kodak (in a joint venture company called Phogenex) and Indigo. The products are aimed at central labs and retail finishers.

According to Ken Fleming, HP's manager, digital imaging solutions, the company is positioning itself to offer a total solution, from image capture to sharing and printing, in store, at home or online.

"We recognize that the PC is still the core of digital photography, but there's so much for consumers to do away from the computer," Fleming said. Moving digital imaging from computer to the world at large, and capitalizing on the various revenue streams that presents, is a high priority for HP, Fleming said.

To achieve this liberation, HP launched a software product at the show that will be merchandized along side its cameras, the Memories Disc Creator. It is essentially a CD with software on it but also open space for consumers to save JPEG image files too. Once burned on, the files can be turned into personalized slide shows with music and title pages and then viewed on a PC or a television on a DVD player.

The HP Memories Disc Creator is expected to be available this month at an estimated U.S. street price of $29.95.

"We're not entering the digital image editing software market," said Fleming, "but we did feel that this was an untapped market for consumers who want to view images away from the PC."

HP also announced a partnership with the online photo service Shutterfly. Shutterfly's online service will be integrated with HP's Instant Share camera and docking station. Users of the PhotoSmart 812 digital camera can tag specific images using the LCD menu and designate how they'll share the image, either via e-mail (on 14 pre-entered addresses) or by indicating how many prints they want.

A tagged image will automatically be e-mailed when uploaded to a computer. Recipients of a photo sent via e-mail through HP will have the option to obtain prints in the mail through Shutterfly's photofinishing services.

Fleming indicated that the Instant Share cameras could be further personalized, so that images are routed back to retail location for prints thus keeping retailers in the profit loop.

"It's something we're in discussion with our retail partners about," Fleming said.