HP On The Move With Notebooks

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Industry analysts said Hewlett-Packard's first two consumer notebook computers introduced last week should instantly establish HP as a player in the notebook market, but tempered their comments by adding the company will have a tough fight grabbing share from the established vendors.

HP has spent most of 1999 swapping first place with Compaq in the desktop market, and the company expects the notebooks to find a similar success, said Bob Nitzder, HP's retail category manager, mobile computing division.

The notebooks will sell under the same Pavilion brand name as HP's desktop PCs, with product arriving in CompUSA and Best Buy this week, Nitzder said. The leader will carry a $1,399 suggested retail, and the step up will be $1,699. HP will add a third model before the end of the year.

Bob Marcantonio, a retail analyst with Levin Consulting, Beachwood, Ohio, was upbeat about the introduction, and noted that HP has experience bringing consumer products to market. Adding notebooks to its extensive consumer PC line makes sense, he said.

"Hewlett-Packard has done an extremely good job transferring their desktop brand from the business market to consumer, and I would expect them to do the same for notebooks," he said.

Patrick Griffin, Compaq's manager of desktop marketing, said HP will have to be closely watched because of its strong consumer brand name.

HP also believes notebook sales will take the same path as its desktop line. "We are looking to use the same strategy that we used with the PC on the notebook side," Nitzder said. He guessed HP would pick up market share, but he guessed it would not come from the top-tier players. In contrast, Marcantonio said HP's share will come from the leaders.

Steve Baker, senior hardware analyst with PC Data, Reston, Va., thought HP will have a tough time competing against the established companies. He said brand recognition will help, but with 85% of the market controlled by Compaq, IBM, Sony and Toshiba, any newcomer could have an uphill battle for share.

Baker said breaking into the consumer market is not always simple. A good example of this, he said, was Toshiba's inability to convert its established position as a business PC supplier into a consumer market success, even though its introductory consumer PC models were innovative and competitively priced.

HP's basic notebook is powered by an Intel Celeron 433MHz processor and includes a 4GB hard drive, 32MB of RAM, 12.1-inch display and a 24x CD-ROM drive. The step up unit features 64MB of RAM and a 12.1-inch TFT display.

Unlike the colorful, stylistic approach Apple took with the iBook, HP's notebooks have a traditional appearance with a midnight-blue casing.

"The iBook is for a different customer. Versatility is our issue," Nitzder said. "Our consumers will come from small and medium businesses, homes or students. We wanted something a person could bring into a meeting and feel comfortable with."


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