HP Rolls Out New Range of Consumer Products, Including iPod

Hewlett-Packard Co. (HPQ) Friday unveiled a range of products including its version of the iPod digital music player that raises the stakes in a war between PC and electronics makers for a spot in increasingly digitized living rooms.

HP, the largest computer printer maker and the No. 2 computer maker, rolled out a 42-inch high-definition plasma television, a DVD home theater projector, new Photosmart printers and an entertainment notebook PC at a news conference hosted by Chief Executive Carly Fiorina (search) in Miami Beach.

This year's unveiling is Palo Alto, Calif.-based HP's third consumer electronicsjor contender in this race to get into the living room," said Mike McGuire, an analyst at Gartner G2. "They already have a substantial installed base with printers, PCs and handhelds."

Earlier this month, HP executives showed the new products to reporters. They included a Digital Entertainment Center, which works as a personal video recorder and ties together movies, digital music and a stereo, among other functions.

HP's version of Apple Computer Inc.'s (AAPL)  wildly popular iPod (search) digital music player has unofficially been dubbed the hPod, analysts said.

The two companies earlier this year struck an agreement for HP to resell the iPod under the HP name, which will boost both companies' exposure to consumer electronics markets.

"The expectation on the iPod is that HP's version will probably outsell Apple's version relatively quickly," Enderle said, due to HP's broad distribution at electronics retailers.

HP also rolled out a new branded line of printer ink and cartridges aimed at photo printing, called Vivera. HP claimed that photos printed with six and eight ink cartridges that use Vivera ink can last 100 years, compared with about the 60 or so years possible today.

"We think the total addressable market for all digital products is probably $360 billion by 2007," Fiorina said at the product unveiling at a Miami Beach nightclub. "We see this as a huge growth opportunity for HP for many years to come."

HP, along with Dell Inc. (DELL) and Gateway Inc. (GTW), have in the past two years increasingly moved into the consumer electronics market, introducing flat-panel televisions, digital music players, digital cameras and other gadgets.

Some, though, have been more successful than others.

Gateway's effort to become a broad purveyor of consumer electronics devices has faltered, largely because it lacked the broad retail distribution that HP enjoys, analysts said.

"Part of the problem that Gateway had no retail presence", said analyst Rob Enderle of market research firm Enderle Group. "HP's products move through lots of retail distribution channels."

But HP also faces its own challenges.

Earlier this month HP posted quarterly earnings a week ahead of expectations that were well below forecasts on weak sales of computer servers and storage gear. The shortfall prompted fresh concerns about HP's ability to provide achievable financial targets and consistent execution.

HP sells everything from multimillion-dollar computer servers, to a wide range of printers at both high and low ends of the market, as well as PCs, handhelds, storage gear, software, and computer services.

But HP has to take chances and move into multiple markets to keep growth going, analysts said.

"While there's always a risk when you move into new areas, HP has no choice but to do this," said Tim Bajarin, an analyst at market research firm Creative Strategies.