HP targets consumers with major printer launch

NEW YORK: Computer maker Hewlett-Packard Co. said on Tuesday it would rejig

its printing business through what it called the single largest consumer product

launch in its history, with more than 50 printer and imaging products.

The company said in a statement it has spent over $1.2 billion in the last

three years on this project. Printers are HP’s most profitable business. HP,

which completed its acquisition of Compaq Computer Corp. in May, said the new

consumer products will be released between now and the beginning of next year.

"It’s a far more aggressive stance .... They’re likely to have

better cost structures because the products are designed from the ground up for

high volume and lower price points," SG Cowen analyst Richard Chu told

Reuters. He noted that HP's previous strategy was to design high-end printers

and gradually introduce them to the middle and low-end markets.

Chu said that because digital cameras will drive an increase in color

printing, the ink products will be more important than the printers themselves.

The investment included $900 million on manufacturing, $125 million on

research and development and $200 million on marketing, said Vyomesh Joshi, HP's

executive vice president of imaging and printing. The initiative involved

completely redesigning its printer products to meet consumers' digital imaging

and photography needs, he added.

"Today’s announcement culminates a three-year investment to make the

process of taking, printing and sharing photos easier and more affordable for

consumers," Joshi said.

HP is kicking off the launch with the introduction of three color inkjet

printers at the PC Expo show in New York on Tuesday. These include the HP

Deskjet 5550 priced at $149, HP Deskjet 3820 priced at $99, and HP Deskjet 3420

which will sell at $79.

(C) Reuters Limited.