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Consumer Products Unveiled by HP

Wall Street is unmoved by new lineup. Firm will spend $300 million on simple-is-better mantra.

August 12, 2003|Terril Yue Jones | Times Staff Writer

Hewlett-Packard Co. called it a "big bang." To industry analysts, the company's long-awaited unveiling of more than 150 consumer products was more of a bust.

As expected, HP on Monday introduced a host of gadgets, including a device that copies videotapes to DVDs, a computer with a built-in camera docking station for easy transfer of digital photos and a souped-up scanner that works like a giant camera.

The Palo Alto technology giant modeled the launch on last year's presentation of more than 50 new printers, an event the company dubbed the "big bang." But this time, the elaborate product debut and appearance by Chief Executive Carly Fiorina failed to generate excitement on Wall Street.

HP shares fell 12 cents to $19.96 on the New York Stock Exchange.

"A lot of investors were expecting Big Bang 2 to be a more revolutionary set of announcements," said technology analyst John Jones of SoundView Technology Group in San Francisco, who noted that investors were hoping to see a more impressive line of gadgets.

Part of HP's strategy is to integrate computers and printers -- two of the company's core products -- with the entertainment and media devices that are becoming increasingly common in homes.

Some of HP's rival computer makers, such as Sony Corp., Apple Computer Inc. and Gateway Inc., "are on that path as well, promoting all their consumer technology products as designed to work together," said Stephen Baker, a technology analyst with NPD Group, a market research firm.

HP is counting on that plan to boost the profitability of its lagging personal technology business.

The Personal Systems Group had an operating profit margin of only 0.4% in the February-April quarter, compared with a 17% margin for its Imaging and Printing Group.

The company said it would spend $300 million this fall to spread its message that when it comes to technology, simple is better.

"Why does it have to be so complicated?" Fiorina asked at the unveiling. "It shouldn't be."

Roger Kay, an analyst with the technology research firm IDC, lauded the company's marketing approach, if not the products themselves.

"They've got it right," he said. "It's got to be drop-dead simple."

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