HP targets SMB markets with new hardware

Server, notebook computers to be launched this week

Hewlett-Packard is adding new entry-level hardware to a product line aimed at buyers in emerging global markets as well as small-to-medium sized businesses.

HP Wednesday is expected to unveil a ProLiant server that could cost as little as US$499 depending on configuration and a point-of-sale desktop computer for retailers that costs under US$1,000. HP is also launching two notebook computers that start at US$649. The products will be unveiled at launch events in Beijing and San Francisco.

The hardware does not have the latest and fastest features of HP's more expensive products. For instance, the HP ProLiant ML115 server is offered with a single core processor, while higher-end servers come with at least two, and often more, cores. But these SMB-targeted machines have features that small businesses look for, HP said.

"They want them to be easy to buy, easy to use and easy to maintain," said Ray Boggs, vice president for small-to-medium and home office business research at IDC.

Smaller businesses, just starting out, don't have a lot of money or an IT department to maintain their computers so vendors try to focus on the design and pricing of their products for that market. The same goes for buyers in emerging economies who may be purchasing their first computers.

Competitors such as IBM and Dell are also targeting the SMB market, particularly in countries such as Brazil, Russia, India and China, Boggs said. The SMB market spent US$400 billion on IT globally in 2006. "That has attracted a lot of attention," he said.

HP's new notebook offerings include the Compaq 6515B and the 6715B. The 6515 comes with a 14.1-inch diagonal screen while the 6715 offers a 15.4-inch diagonal screen, said Carol Hess-Nickels, director of worldwide business notebook marketing for HP. They are all built for use on wireless networks and often come with a docking station for use in an office.

There are other features specifically designed with the small business owner in mind, Nickels said. For instance, a security feature encrypts all the data onto the hard drive as it is being written and saved. That's important because small business owners often have most or all of their company's data on their laptops as they take them to client meetings, on trips and elsewhere.

"A laptop is much more likely to be left in a taxi cab than a desktop," she said.

For retailers, the rp5700 point-of-sale desktop computer replaces the rp5000, which has been on the market for several years, said John Snaider, vice president of HP's business PCs segment in North America. It offers 10 USB ports to attach peripheral devices such as a bar code reader, a credit card reader or a receipt printer. It also features data storage capacity inside the machine and remotely.

HP is also introducing the dx3200, a "microtower" server targeted toward the SMB market, with a starting list price of US$379.

"This is a very competitive segment of the market and I would not be surprised to see some response (from competitors)," said Michael Speyer, an SMB market analyst at Forrester Research.

But if the products are entry-level priced, Speyer wonders how aggressively HP resellers will push them if their margins are lower than for more expensive items.

HP's Snaider responded that HP has long sold entry-level products through resellers as well as high-priced and higher-margin ones. "There's a space for everything," he said.

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